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How to Calculate Job Costs with Mechanical Estimating Software

by Chris Lee | March 22nd, 2018

Mechanical estimating takes time. When you need to be spending time in the field making money, it can seem as though the estimates you need to complete take too much time. Fortunately, there's an easier and more time-efficient way to finish your estimates while ensuring that they're accurate and reflect the reality of the job you're considering. Mechanical estimating software provides you with the tools to get your estimates done and get back out into the field as quickly and effectively as possible. Here's a quick look at how the process works and where it's different than traditional estimating practices.

How to Calculate Job Costs with Mechanical Estimating Software

In the past, the only way to estimate a project was by looking at paper plans, recording measurements and counts by hand on a list, spending time talking to suppliers to get updated prices, figuring your total costs, estimating how long the project would take and then working it all up into a written estimate. If prices changed, if the count or measurements were off, if you didn't account for portions of the project that were more labor-intensive than others, you would end up losing money instead of making a profit on the project.

With the advent of the the computer age, the process has become digital, but some of the same problems still exist. Paper plans and lists hit the sidelines in favor of digital plan files and spreadsheets. But time was wasted and errors were made with changing back and forth from one screen to another to see the plans and record the information in the spreadsheet. If the formula on the spreadsheet was accidentally changed, it would create problems through the entire process. And of course, the same issues of labor and material costs could come into play as well.

Fortunately, today's mechanical contractor has other options available. Modern mechanical estimating software provides a range of tools that help you avoid many of these issues. Plans can be imported or digitized with ease. Takeoffs happen on the same screen, helping avoid errors. Pricing databases are automatically updated, helping you avoid pricing problems with the project. Formulas are protected, making it easier to avoid errors. In many cases, you can even compare your estimates against national averages to provide a secondary check that your numbers are reasonable. Automation and cross-program compatibility allows you to minimize manual input into your accounting and bid outputs. But how does the process work exactly?

To start, you'll want to take a solid look at the project before you start the estimate process. After all, if it's a poor fit to your company's expertise and capabilities, it may not be worth wasting more time on it. If it's stretching your capabilities in a direction you want your business to go, make sure to carefully study what's involved so that you don't end up with unexpected expenses at the end of the project. Take the time to make sure you have a good grasp of how your systems will interact with other parts of the structure.

Next, you'll start your takeoff. You'll want to make sure you're recording every product, supply and tool that will be needed to finish the job. Take the time to double-check the numbers to make sure they match. Then you'll want to take another look along the plans to determine your labor costs. If some areas are poorly planned or will be awkward to work in due to structural needs, add a larger cost margin for that aspect of the project to cover additional labor or equipment expenses. Can you easily obtain all the items needed, or will some need to be ordered in or fabricated to work? If they do, you'll also need to make sure you've got a better margin in case there are issues with shipping or a local fabrication shop's schedule that will require rush fees.

One area you should consider is whether the project is a new construction or a retrofit. Older buildings, especially historic structures, often have odd sizes, unusual materials or other aspects that make them a bit more difficult to work with. Another area of concern is electrical supply for the systems you're installing. Make sure you've determined how much work will be involved in the retrofit, even taking an on-site inspection if needed to get a good grasp of the issues at hand if possible.

Take a quick look at labor concerns, such as union jobs, additional or specialized personnel, transport times in a high-rise, or similar aspects and make sure to account for any extra, unexpected labor costs for the project. After you've determined about how much labor should be required on the project, you'll want to include a profit margin – after all, you're in business to make money, right?

Once calculations have been completed, take a break and then come back to double-check your figures or have someone else take a look over the paperwork for errors. After that's done, you can work on putting together the final estimate for the client. You'll want to make sure that it looks neat and professional, while still carrying your personal branding to ensure it's different than all the other standard quotes that will come in. Good-quality mechanical estimating software will include options that allow you to customize your estimates to meet your needs. Once you have all your paperwork together, it's a simple task of turning in your estimate to the client.

By having a good grasp of how to use mechanical estimating software to prepare your job costs and final estimate, you can save time and effort while ensuring that your business remains profitable. But how do you select the best software for the job? Esticom features tools to minimize time spent on estimates, automates your back office tasks, lets you access notes from anywhere on any device and lowers overhead expenses. Our free trial of mechanical / HVAC estimating software gets you started right now.

Chris Lee
Chris Lee has an extensive background in preconstruction management as a former specialty contractor and business owner. As the Chief Estimator at Esticom, he’s helped thousands of specialty contractors digitize their preconstruction process to increase revenue and profitability while decreasing unnecessary overhead.

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