How to Manage Estimates and Proposals Like a Pro

Learn how to create accurate and professional estimates and proposals for clients using restoration management software.

Estimates are important for many businesses, especially those involving various trades. No matter how big or small, every restoration contractor must understand this process intimately. For a restoration project to be successful, it’s imperative to understand the expenses involved in restoring a structure to its original state. Management of these costs requires accurate quotations to be given to customers, while the contractor must also ensure that taking on the job is profitable enough to make it worthwhile.

Recognizing the profitability of different types of projects is what helps a restoration company grow. It takes detailed knowledge of the costs of equipment, labor, materials, municipal codes, and other elements a restoration project encompasses. Trends in pricing and competition also play a part in how a contractor estimates the cost of a job. Restoration companies increasingly use software to help with restoration estimating to determine costs and profit margins.

Restoration Estimating: Software to Help Restorers Accurately Assess Costs

Estimates shouldn’t be about winning every bid. It’s just as important to put together an accurate estimate so that a contractor knows they can profit when taking on a specific type of restoration. Estimating software can help determine whether a potential restoration project is worth investing time, money, and effort. Estimates should guide project managers on which jobs they give the most competitive bids and which ones may be better to pass, or at least bid higher to make taking it on worthwhile.

Depending on the job, a restoration estimate should inform about: 

  • Services that will be performed
  • Major objectives of the job
  • Deadlines for specific phases of the project
  • Costs of supplies and materials
  • Assessment of the total price of the job

Each component is more than a quote’s price; it is a comprehensive evaluation of what it will take to complete the job. While the initial restoration estimate will be an educated guess, it should consider the above subcategories to achieve greater precision.

Understanding the Requirements of a Job

Before even beginning an estimate or proposal on a project, it’s crucial to know a customer’s requirements. To get to that point, choosing a method for restoration estimating is necessary. Software for project managers should allow for multiple approaches to pricing a job, allowing input of all the data necessary to make an informed bid on a job.

Estimating techniques used for restoration companies might include: 

  • Top-down estimates: This technique begins with a broad overview of the project, breaking down the estimated costs for major stages of the work. A top-down estimate will often be proposed by a contractor or project manager when there are few specifics available, and such estimates are sometimes just used internally to determine whether it’s worth the expenses incurred to take on a project.
  • Bottom-up estimates: Generally considered more accurate than a top-down estimate, these detail expenses for a list of tasks that need to be performed, with a projected cost for each. They tend to be more collaborative, involving whole teams rather than just the project manager or contractor for a restoration; estimating software with tools for collaboration and communication is useful for this approach.
  • Analogous estimates: This type of bidding technique looks at similar jobs done previously and what they cost, so is generally used when information is limited. For restoration estimating, software can help project managers or other stakeholders who are experienced in the type of job to make estimates by looking at historical data from past projects.
  • Parametric model estimates: Also utilizing historical data from past projects, these estimates do so in more detail and are considered more accurate than analogous estimates, as they identify unit costs and duration of previous work while scaling up or down for the current job. For project managers bidding on a restoration, estimating software can use parametric modeling to create an even more accurate estimate that details costs.
  • Three-point estimates: Often considered the most accurate estimating technique, this approach calculates the cost of a project from three different perspectives, considering the most optimistic and most pessimistic outcomes as well as the most realistic outcome. Taking the average of these three estimates, they’re often used by project managers who understand the risks involved in a specific restoration, with estimating software a useful tool in determining the three possible outcomes and their average.

The type of strategy used to assess costs matters less than its accuracy, and it may differ depending on the project manager or the kind of job. For any restoration, estimating software should be able to support all, or at least most, of the above types of estimates.

Accurate Restoration Estimating & the Software to Support It

While there are ways in which to estimate a job without knowing everything about it, creating a detailed estimate will help a restoration company win the bids it most wants while also ensuring at least a decent profit. In doing so, it’s important to recognize the constraints regarding the cost and time it will take to complete a project and its scope. A project manager must ask assessors, customers, subcontractors, and other stakeholders questions to glean these details and estimate accurately. 

Some questions a project manager might want to ask stakeholders include: 

  • What are the project’s goals? Knowing what will (and will not) be achieved by the end of a job is important for any property owner; a customer wanting a roof replaced that isn’t covered by an insurance assessment should understand what they will need to pay privately to get the job done.
  • How will the success of a project be determined? For some customers, quickness may be more desirable than cost; for example, a business owner may want truncated timelines for repairing their property to provide the least disruption to their establishment’s trade.
  • Who needs to accept the estimate? For restoration work, most jobs will first need to be approved by the insurance company; however, a homeowner may wish to upgrade their roofing material to better protect it from a future storm, for which they will be required to pay more out-of-pocket.
  • What type of work needs to be done? This is especially important information for any restoration estimate; software that helps contractors evaluate costs of past projects will help make bids more accurate and reduce uncertainty.
  • What amount is budgeted for the work? Regarding restoration, estimating software that helps calculate a budget can help a project manager quickly determine whether a job is worthwhile.
  • What specific equipment or technology is necessary to complete the job, and at what cost? For restoring a flooded property, for example, equipment like a sump pump and technology that assists with mapping moisture may be necessary to complete a project; if a restoration company doesn’t already have these tools, the purchase price or rental should be factored into the final cost.
  • What’s the timeline for each phase of the project? More so than many other industries, time is money in a restoration; estimating software can help translate the cost of this time into money, while many platforms include scheduling tools

The more concise and detailed the answers a contractor gets, the greater the accuracy they can offer a customer in a restoration estimate. Software used in making a bid tends to be more precise the more comprehensive the data.

Features to Look for in Software for Restoration Estimates

Numerous types of software platforms utilize applications for restoration estimating. Software programs for restorers should include some tool that helps with bidding on jobs. While many restoration contractors like Xactimate provide an array of options that include a user-friendly interface, industry-related pricing information, and 3D diagrams, it’s not the only tool for quoting on a restoration. Estimating software need not even be designed specifically with that in mind. Accounting apps like QuickBooks Online offer tools to ease estimations, providing templates to create professional quotes with personalized messaging while also turning accepted estimates automatically into invoices.

For companies looking into restoration estimating software, features to look for include: 

  • Data visualization capabilities that allow charts, dashboards, graphs, and other visual representations of data to make interpretation easier.
  • Cloud-based software that enables estimates to be sent from anywhere at any time while also allowing almost unlimited storage of data from past jobs.
  • Capabilities to update and refine estimates as more up-to-date figures become available.
  • Artificial intelligence (AI) software that utilizes machine learning to help project managers generate reports that help optimize a restoration company’s overall performance.
  • Analytics tools are used to collect, evaluate, interpret, and process data to glean insights from it and improve the estimation process.

With cloud-based software that can visually describe a quote, store unlimited business data, change estimates with little effort, optimize data through automatically generated reports, and evaluate historical data to augment accuracy, making restoration estimates becomes much easier.

Fine-Tuning Estimates 

As intimated earlier, sometimes alterations are necessary when estimating for a restoration. Software used for bidding needs to be flexible enough to make changes easily. While an initial proposal is more like a recommended plan of action, an estimate approximates the cost of the work on a building restoration. Estimating software must be flexible enough to fine-tune an estimate, especially when new information becomes available, such as price fluctuations on materials or higher-than-expected bids from subcontractors. Modern software for estimating restorations should also enable contractors to send the quote out digitally.

Making Estimates Look Professional

Providing potential customers with an estimate of how long a job will last, its costs, and the resources needed to complete it is central to any restoration. Estimating software should go beyond the figures to make prospective customers see the contractor as a professional worthy of their business. Oftentimes, this means ensuring an estimate concisely explains the cost in a way that’s easy for someone not in the industry to comprehend. Sure, a project manager could scribble a bunch of figures on a scrap piece of paper and hand it to a customer. However, wouldn’t it be more impressive to provide a prospect with a detailed account of costs on the spot and in a simple, appealing format?

Using Albi for Restoration Estimating

Though estimates aren’t legally binding, they often determine whether a customer will choose a specific contractor. Considerations may just be about price, though a customer may be more impressed by a detailed accounting of everything the contractor will do to return a property to its pristine state. Other times, the efficiency a customer sees may prove the deciding factor, with a quickly produced proposal given right after the initial assessment weighing the odds in a contractor’s favor.

It might just be the salesperson evaluating the job is likable and persuasive, which no restoration estimating software can achieve. Combining a good sales team with a cloud-based platform like Albi that utilizes AI to optimize performance, helps with calculating estimates through analysis of historical data, allows for visualization of data to make it easier, aids collaboration on estimates with shared communication tools, and offers other useful features can increase a restoration company’s profitability. To learn more about Albi’s capabilities, book a free demo today.