How to Estimate the Cost of Aluminum Windows and Door Systems
Introduction
In the construction of most habitable buildings, one of the most important components is the installation of windows and doors. While there are many different types and sizes, this paper will focus on the general process of estimating the cost of aluminum windows and doors. Additionally, the paper will touch on the different types of windows and doors available along with the different performance specifications, finishes, and the important factors to consider along the way.
MasterFormat Information Division
08 00 00 - Openings Subdivision
08 51 10 - Aluminum Windows
08 80 00 - Glazing
Brief Description
Most commercial and/or residential buildings contain windows and doors. Aluminum windows in particular came into the picture in the early 20th century during a time when wood windows dominated the market. These windows and doors became more and more popular amongst builders due to affordability, durability, low maintenance, and ease of operation.
They are typically used to enhance the look of a building, provide airflow through the structure, emergency egress or simply to allow light into a space. The most typical window types used, which we will discuss in detail later, are: fixed, horizontal roller, single hung, casement, and project out/ awning windows. In terms of doors, the most commonly used are single doors, double doors, and sliding glass doors.
Types and Methods of Measurement
During the quantity takeoff phase of estimating the cost of aluminum windows and doors, the most prominent methods of measurement are
Square Foot (SQFT), Linear Feet (LF), or Unit Count (EA).
The SQFT is achieved by multiplying the width by the height of any given frame or opening and is most commonly used in the conceptual stage or the budgeting of a project. It can be used to calculate the overall amount of each unitized window type or glazing needed but it’s important to note whether the SQFT measurement that is being obtained pertains to the rough opening, frame size, or glass as these are all different and can affect the overall accuracy of the estimate vs the actual cost of the project. Additionally, this type of measuring tool becomes most
useful when tracking estimate cost for historical reference. Having a record of cost per SQFT can provide easy indications of market trends as well as serve as a reference for labor costs, material costs, equipment costs, and engineering.
In estimating unitized windows and doors, the linear feet measurement unit is generally used for calculating perimeter sealant and backer rods. The linear feet are commonly obtained by simply calculating the number of feet and inches spanning the perimeter of an area. On the off chance that the scope of work also includes the trim around the window or door opening, these will also be calculated using the LF measurement unit.
Unit counts are largely used on a takeoff to identify the number of certain window or door types, hardware needed, anchors, and fasteners. Using the window and/or door schedule, the estimator can easily identify and group the different window and door types, organize the ancillary items pertaining to each, and assign a unit count, per the plan takeoff to each for pricing.
Whether using square footage, linear footage, or unit count method, the estimator should always confirm that the schedule, floor plans, and elevation drawings are in agreement to account for the entire scope as not all required windows and doors may be shown in one place.
Specific Factors
Effects of Geographic Location
Geographic location is one of the primary driving factors in estimating aluminum windows and doors. The location of a project will more often than not determine the desired frame type, glass type, and even finish type. Differences in building materials in different geographic
Irving Ruiz, CPE
Orlando -50
irving.ruiz777@gmail.com
Irving is a seasoned estimator with over a decade of experience in the field. Currently working with Walt Disney, Irving's career began with an internship in the Planning and Zoning Department of his local town. He quickly advanced to a Junior Estimator role at Tectonic Metal & Glass. His career further blossomed when he joined All American Windows and Doors in Fort Lauderdale, a prominent glazing company. During his four years there, he excelled in reviewing bid packages, analyzing architectural and structural plans, and providing precise estimates in line with the Florida Building Code. Irving's expertise is complemented by his dedication to professional development, including regular attendance at glazing workshops and completion of PGT University’s training courses, solidifying his reputation in the industry.
locations can fluctuate the difficulty of installation as well. For instance, projects in colder climates generally contain wood framing and may require thermally broken aluminum frames along with glass coatings to assist in climate control whereas in warmer climates, a thermally broken frame may not be necessary but insulated glazing will with special energy-efficient coatings used to help maintain a comfortable temperature in the building. Projects in areas prone to severe weather may require CMU construction along with impact-resistant windows and doors to withstand the high winds and airborne debris. An additional factor to consider is the effects on labor and additional material costs as a result of the geographic location of a project. Locations with colder seasons can have more expensive labor due to decreased production, and differences in materials along with installation of said materials. Warmer areas have the benefits of less downtime due to a winter season, but they contend with wetter weather which, like cold weather, can stop production therefore increasing the labor costs. Lastly, the areas prone to severe weather may require additional materials to provide protection to the building components and occupants. In a nutshell, the geographical location, the seasons, and performance requirements of the project area must be taken into consideration when putting together an estimate for aluminum windows and doors.
Effects of Project Size
It is no surprise that with larger material quantities come lower manufacturer prices on said materials. Most aluminum windows are made-to-order and project specific. Therefore, when comparing projects with a high amount of windows and doors versus a project with a small amount, the project with a higher amount of windows and doors will have a lower cost per unit. Manufacturers can maximize the use of raw materials and minimize waste which results in savings that can be passed down. The same can be said for hauling and storage costs where each haul containing larger quantities should have a lower unit cost versus the smaller. Consider this, the fixed cost of a storage container will remain the same whether you have one window or one dozen windows. The more windows you can store, the more unit cost for storage becomes more efficient.
Overview Costs
When estimating the aluminum windows and doors, it is essential that the estimator reviews and understands every aspect of the work scope. A complete review of the project specifications and its cohesiveness to the window/door schedule along with the architectural drawings is crucial for the accuracy of the estimate. Fail-
ure to conduct the necessary reviews of all construction documents available will have an impact on the competitiveness of the completed estimate which could directly affect to whom the project is awarded or, more importantly, the loss of profit upon completion of the project.
Project Specifications
The project specifications are generally the first set of documents to review. These documents will provide great insight into the types of windows and doors, finish, glazing details, hardware, and performance specifications the architect is requiring for the project. With so many different window types to choose from, sometimes it isn’t just what windows fit esthetically, but also which are required to meet a specific function or building code. It is important that the estimator is familiar not only with the types of windows and doors spec’d for a project but also with the performance specifications as well. There are so many different variables to consider, amongst these are frame performance (positive/negative pressures), glass thickness and efficiency ratings, finish, and operator types. The most common types of aluminum windows and doors are as follows:
• Fixed Window – Window that is immovably in a wall. It contains no moving sash or hardware.
• Single Hung – Windows that have two sashes: a fixed one in the top half of the window, and a sliding one on the bottom that moves up and down.
• Awning – Windows that have hinges on the top of their sashes and swing out from the bottom.
• Casement – Windows that have hinges on the sides of their sashes and open by swinging out or in.
• Horizontal Slider – Windows containing sashes that slide from side to side.
• Double Hung – Similar to a single hung, except both sashes move up and down.
• Single French Door – Pedestrian door having only one swinging leaf.
• Double French Door – Pedestrian door having two operable leaves.
• Sliding Glass Door – Pedestrian door mounted above and below tracks for ease of movement from side to side.
Performance
There are different performance ratings that surround not just aluminum windows but windows as a whole. The National Fenestration Rating Council, or NFRC, is an independent third-party non-profit organization that provides certification for windows, doors, and skylights. The four main performance ratings are U-Factor, Solar Heat Gain Coefficient, Visible Transmittance, and Air Leakage. Energy Star qualifying windows have passed very strict energy efficient guidelines which are set by the US Department of Energy.
• U-Factor is the measure of how well a window can keep heat from escaping.
-The range for U-Factor is between 0.20 and 1.20.
-The lower the U-factor value, the less heat a window allows to escape.
• Solar Heat Gain Coefficient (SHGC) is the value that measures how well a window handles the heat gain resulting from the sun.
-The range for SHGC is between 0 and 1.
-The lower the value, the better the window’s resistance to heat gain from the sun.
• Visible Transmittance (VT) measures how well daylight is able to get through a window. This is especially considered when natural light is highly desired in a space.
-The range for VT is between 0 and 1.
-The higher the VT value, the more natural light the window lets in.
• Air Leakage measures how much air will enter or leave a room through a window. The measurement represents the number of cubic feet passing through a square foot of window per minute.
-The lower the air leakage value, the less air is able to enter or escape a room through the window opening.
-The value, obviously, assumes proper installation.
Finishes
Another driving factor that can affect the overall cost of windows and doors is the finish. Smaller projects are more susceptible to being affected the most by a custom finish, but special attention should be directed towards specified finish as the upcharge for custom finishes can be substantial. The American Architectural Manufacturers Association (AAMA) has established standards and classes that assist architects when defining the proper product performance required for each application. The estimator should be familiar with the approved finishes for a project upon completing a review of the specifications previously discussed. Fin-
ishes for aluminum windows and doors are primarily: anodized aluminum finish, baked enamel/Kynar finish, or powder-coated finish.
• Anodized finish is an electrochemical process that involves thickening the natural oxide layer to create a dense film. The longer the aluminum is left in the anodizing tank, the thicker the film. Different category levels are determined by the length of time in the anodizing process. Benefits of anodized finish include:
-Durability against corrosion and general wear
-UV protection for outdoor usage
-Easy to maintain
-Wide variety range of colors through dye
• Baked enamel finish, also known as Kynar finish, is a metal finish that contains polyvinylidene fluoride. It is a non-reactive and thermoplastic substance that becomes pliable when heated and returns to solid once it cools. Benefits of Kynar finish include:
-Resistance to humidity
-Gloss finish
-Mechanical reinforcements
• Powder-coating is a dry coating process through an electrostatic process which is then cured with heat. It provides a high-quality finish that can be used on different surfaces including concrete, steel, plastic, and aluminum. The benefits of a powder-coated finish include:
-Environmentally friendly
-Cost-effective
-Polished finish
-Durability
Window & Door Schedules
The window and door schedules are probably one of the most important drawings for performing any takeoff and/or estimating. It is typically included in the full architectural set of drawings and contains detailed information for each opening on the project. It is imperative that the estimator cross-references these schedules with the project specifications along with the floor plans and building elevations for correctness before starting the takeoff process and address any inconsistencies with the GC or architect via an RFI for clarification. Again, since most of the information necessary for takeoff and pricing is derived from these schedules, the estimator must be confident that the information is correct. Windows are commonly identified with alphabetical letters on the schedule and doors typically use numbers, but this may vary depending on the architect’s style (see sample drawings). Once the information has been
reviewed, the estimator can move forward with verifying the openings on the schedule match those in the floor plans and building elevations as part of the takeoff process. Be mindful of the fact that not all windows, such as clerestory windows, will appear on the floor plan so cross-referencing the elevations is very important.
Hardware Sets
Included in the architectural set of drawings is also a hardware schedule. This schedule simply groups together the hardware necessary per opening. Each set will vary depending on the function of the opening and may be assigned to multiple openings that are conducting a similar function. A typical residential door may include a simple set containing hinges and a lock set and may be assigned to multiple doors in one project. A commercial door, on the other hand, may require a more complex set which could include panic entry hardware, closers, magnetic locking mechanism, and other building code-required items such as ADA-approved hardware. Similar to the windows and door schedule, it is important to cross reference the hardware schedule with the project specification and making sure that both correspond with each other.
Labor & Material
More often than not, aluminum windows for residential projects will consist of unitized systems. The term unitized system is commonly used in storefront framing but simply means the window unit was fabricated and pre-assembled prior to delivery to the site. Commercial and mixed-use projects frequently use storefront systems as the base of their design and incorporate the operable windows and doors within. With that being said, labor and material are highly affected by the method specified. Unitized systems have a higher manufacturing cost but save a lot more time in installation time. Stick systems require for the frames to be assembled at the job site which could take longer and be affected by any potential weather constraints. The desired framing system type is often decided by the architect and specified in the project specifications along with desired manufacturers so the estimator should be very familiar with the acceptable systems prior to completing the pricing.
Risk Consideration
Estimators should become familiar with several risk factors and include a fee or allowance for said factors in the final estimate. These factors include but are not limited to the following:
• Special contract terms including scope of work
• Project location and time of the year
• Manufacturer lead times especially when custom finishes are involved
• Project access & crew parking
• Disposal and storage
• Building height and location
• Fall protection and safety
• Protection of other trade work
• Cost for testing and permitting
Ratios and Analysis
Historical data has become one of the most popular methods of analysis in the aluminum window industry. There are a wealth of different aluminum windows and door projects, all of which have multiple installation and sizing or components therefore conducting a thorough review of the estimate once it is complete, and logging costs of different materials, finishes, glass make-up, and custom items. Tracking this information will prove to be a valuable tool in future estimate creation. Some of the most helpful items to keep track for historical pricing include:
• Cost per square foot of the project entirely
• Cost per square foot for each individual window type
• Cost per square foot for installation
• Cost per square foot for hauling and delivery
• Cost per linear foot for sealant
Miscellaneous Pertinent Information
Estimators should be mindful and take every opportunity to obtain as much information from as many outlets as possible to complete the estimate to the best of his/ her ability and understanding. The following is a list of potential miscellaneous information that may be considered:
• Impact Resistance – Many areas that experience extreme weather, particularly along the coastal areas may require a certain level of impact resistance. For example, the Florida Building Code requires for areas within a certain wind zone to meet a certain level of wind resistance. For that reason, manufacturers have been required to test window systems and obtain a Notice of Approval. Careful review of the project specifications along with a review of the manufacturers' performance testing should be conducted to ensure the system being quoted meets and/or exceeds specification requirements.
• Sound Transmission – STC is used to measure a window's ability to reduce sound. For projects located in urban or high-traffic areas, an estimator wants to
become familiar with this rating and how it will affect pricing. The typical rating for a single pane is 18-20 and the double-glazed window is 28-32. The higher the number, the better the window is at keeping out outside noise. Again, this requirement will be determined by the architect and can be found in the project specifications.
• Sealants – Sealants are great water intrusion barriers. The American Architectural Manufacturers Association (AAMA) has tested and rated sealants and has been increasingly accepted as the standard for which architects select the required sealant for
Details and Sample Plans
an application.
Therefore, much like the other items above, it is important for an estimator to become familiar with the sealants specified prior to completing a bid as this can affect material cost.
Ultimately, preparation going into any estimate is key. Becoming acquainted with the project, its location, the building code requirements, wind zone requirements, and the project specification is the primary building block to a good quality estimate.
Sample Window Details:
Sample Window Schedule:
Sample Floor Plan:
Sample Floor Plan:
Sample Takeoff:
Glossary and Acronyms
AMA -American Architectural Manufacturers Association – is the window industry trade organization that establishes voluntary standards for windows, doors, and skylights, e.g., AAMA/WDMA/CSA 101/I.S.2/A440-08. It also certifies to those standards. AAMA has developed a product designation, e.g., AW-PG45-H, which incorporates four well-accepted performance classes - R, LC, CW, and AW. These designations assist architects, specifiers, and building owners when defining the appropriate product performance required for each application.
air infiltration rate -amount of air leaking in and out of a building through cracks in walls, windows, and doors. The lower the value, the better. It is usually expressed as cfm per square foot of window area.
awning window - window in which the operating vent move out (project out) from the master frame. Each vent is hinged on top horizontal axis to permit easy operation.
backer rod - foam rod used behind caulking to prevent caulking from falling away from the caulking joint.
bead - molding or stop placed around a window frame to hold glass in place by pressure.
design pressure - project’s wind load to be determined by the architect and expressed in psf, e.g., "the project design pressure shall be 38.7 psf, both positive and negative." It is also referred to as the project’s Design Load. Also, see ‘wind load’.
Energy Star® - independent organization created by the U.S. Department of Energy (DOE) to establish and measure a standard set of guidelines to recognize the energy efficiency of various products. These guidelines are used in conjunction with a variety of building materials,
including windows.
galvanic action - when dissimilar metals, e.g., steel fasteners and aluminum extrusions, are in contact with each other in the presence of an electrolyte, e.g., moisture, a low level current flows resulting in galvanic action or corrosion. Applying a coating, e.g., paint or plating, will prevent this condition.
glazing - process of installing glass or panels into the sash or frame of the window.
IGU - insulating glass unit - two pieces of glass separated with an air space and hermetically sealed (sealed against moisture vapor). IGU heat transmission may be as low as half that without such an air space.
impact window - window that has been tested to resist hurricanes, e.g., large missile, small missile, and cyclic wind. Laminated glass is required to resist penetration and maintain the window integrity during a hurricane. Impact windows are designed to protect buildings from hurricane wind and water damage.
low E glass - transparent coating applied to a glass surface to separate long wave (furnace heat) energy and short wave (sun heat) energy. The long wave is reflected back to the heat source. The short wave is allowed to pass selectively through the coating. Also see pyrolitic ‘hard coat low E glass’ and sputter ‘soft coat low E glass’.
NOA - Notice of Acceptance – issued by Miami-Dade County, Florida, to indicate certification for impact-tested products used mostly in hurricane-prone zones. It is valid for five years.
R value - measurement of heat resistance. The higher it is, the better. R value = the number 1 divided by the U value.
sash - operating portion of a hung or horizontal sliding window.
SHGC - solar heat gain coefficientsolar heat gain through the glass. It is 86% of the Shading Coefficient. It is a newer measurement used by the National Fenestration Rating Council (NFRC) to rate a window’s performance. The lower it is, the better, to reduce summer heat gain.
STC - Sound Transmission Class - describes acoustical control for interior panels, and, even though inadequate, it is currently the only criteria for exterior windows. The higher the number, the better the product is at resisting typical sound frequencies excluding airplane and train noises.
thermal break - element of low conductivity (nylon strips or polyurethane) placed between elements of higher conductivity (aluminum) to reduce the flow of heat and cold.
tinted glass - glass of special formulation to produce light reducing and/ or heat absorbing glass products (bronze, gray, blue, or green).
U value - a measurement of heat transmission. The U value is measured by the number of BTUs that will pass through each square foot of area per degree of temperature difference from one side of the window to the other. The lower it is, the better UV - ultraviolet - rays of the sun that can filter through windows and heat up a room, as well as fade furniture, rugs, and paint finishes. The lower it is, the better, to reduce fading.
wind load - force exerted by winds on structures. The force can be inward (positive) or outward (negative). It is expressed in pounds per square foot (psf). It should not be confused with a project’s location “Basic Wind Speed”, which is expressed in miles per hour (mph).
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So You Want to Start Your Own Estimating Consultants Business? Some Lessons I have Learned.
Congratulations for having the entrepreneurial spirit. Most people wish they could work for themselves; it’s in the spirit of us all to call our own shots, choose the hours we will work, bank all of our profit. In the words of Walt Disney, “The way to get started is to quit talking and begin doing.”
Well before you get to “doing”, I would like to share some information that may be of benefit to you before taking the road to starting your own “Estimating Consultancy Business”.
I recently closed my business after five years. It was quite an adventure, and I am proud that I lasted five years in a business that the majority of the construction industry does not even know exists.
When I started my business, the industry was still in the throngs of our last recession. The construction industry was one of the hardest hit
and the commercial general contracting firm that I was employed with was starting to lay off superintendents and project managers. As the lead estimator, I started to see fewer projects coming through the door, even though the business development team was doing all it could to generate leads and working hard to bring in projects that we all hoped would be good fits for the company. Every business had to be very lean to obtain even a fair profit. I don’t know if that will change in the immediate future.
It has always been a dream of mine to return to the world of the self-employed, after all, I was once a self-employed contractor when I was younger and not only did I learn tons of information about being in business, I also had fun working with my hands, heart and mentoring fellow carpenters. I was able to be around home more often to help
raise my terrific sons, as my wife was employed as well. There were times when the income of another person in the household was a tremendous asset due to late paying customers or slow times that happen in the construction industry.
When I went to the next chapter of my career as an estimator, I was always intrigued by the thoughts... “I wonder if the industry would pay for outside estimating services?”
“Could I make a living assisting with cost estimating and doing takeoffs?”
The thought of it was always with me during my estimating tenure as an employee.Now I had another set of skills, developed not only from the 21 years of estimating as a self-employed contractor but also 10-plus years of leading the estimating department for a few commercial GCs along with joining and being active in the American Society of Professional
Estimators (ASPE) and earning my Certified Professional Estimator (CPE) certification. I felt I was in a perfect position to try this new adventure in case anything needed to happen. Well it did happen five years ago when I was laid off due to the economy in the area where I was employed. They were taking the direction that the PMs would do their own estimating. No need for estimators as far as they were concerned.
Perfect; a great time to start the new business. No more going to work for anyone else; I was going to start an estimating services business.
I had been researching estimating firms in the evening while working on my business plan…they were out there. Only a few in my region and they specialized in Site & MP&E scopes. I decided to take the architectural route.
There was also the beginning of the organization called Consulting Estimators Round Table (CERT) that I was fortunate to find. A great organization of peers that I was lucky to be involved with in the beginning stages of becoming an association.
Now I will be surrounded by established firms that could offer advice and assistance when needed. I was happy to see that the majority of these members were fellow ASPE members and most of them were CPEs like myself... this was setting up nicely and it was time.
OK, what did I need to do to get busy and official?
Get a name and get incorporated: You need to have this to be legit and for the benefits of tax write-offs for your new business but also for your liabilities (more on that later). Besides having an INC, LLC, or CO behind your name or company name is more professional. You will also need a Federal ID number. Your new
clients will require this when they send you their W9 forms or you will not get paid.
Marketing:
Business cards, perhaps a brochure describing your services at the beginning because you will need to get out and start shaking the bushes, marketing yourself, and attending every industry event you can, even in the evening and times when you are tired. You need to get your business name and your talents out there and you will find that many times you will need to explain what it is you do, why you do it, and why they would even need your services. Be ready with your seven-second elevator speech because this may be all the time you have before they lose interest. Write down every question that you can think of being asked because you will be asked, believe me. And get your answers down to memory. Have some friends or family ask you some questions; they’re good sources.
Get a website:
This is so important. We are all involved in the internet and do all of our research, purchasing, and pleasure-seeking no other way. Your future clients also use the internet to find assistance. This is your resume posted out there for all to see, it’s what you do, how you do it, and why you do it.
Social media is also key—you need to embrace these outlets of marketing (such as LinkedIn and others) and maintain them. This will cost money and the more money spent on your website, including the additional funding required to get your company’s information to the top of a search engine, will pay off much more than not having one. Also, you will need to get an email address to match up with your company name. You need to present yourself as professional and capable.
Clients:
You may be fortunate and get a couple of clients out the door based on your reputation and contacts, but you will need to keep your marketing going just as strong. Having a couple of clients will only go so far; they will inadvertently find ways of frustrating you, including financially. The old adage of “don’t put all your eggs in one basket” holds so true here. You must remember that although you may think that they will keep you plenty busy (and at times they will), they will also have slow times or more work than they can handle so they may need to pull back on using your services.
During my time in business, I had many clients that were jammed up due to the company’s in-house estimators being very busy. Their big need was in takeoffs so that they knew what was in the project. Let me repeat this line, many clients were jammed up due to the company’s in-house estimators being very busy. This does not happen very often, so you may only get them as a client for a few projects or maybe even one. The boss may not need to hire another estimator just now… “let’s get through this crunch with an outside service for now. I may start looking for another estimator if this keeps up”.
This is a reality; be ready to have as many clients as you can handle professionally.
I always was able to manage no more than five without being stressed and overworked. Now you may be able to handle more if you specialize in one, two, or three particular trades but that will be something that only you will be able to determine as you progress.
Architects and developers are good clients especially if they realize that they do what they do best and have enough in their budget to afford your
business for project costing.
Those are tough to find... I respect so much the firms that have a client base of architects, they have worked very long and very hard for those clients.
Subcontractors are good clients also but they are very much the same as GCs, they will contact you when they are busy. New to the business subcontractors make good clients, but their goal is to be successful enough that they can have their own estimators…so ride that wave when you can get it.
Other estimating firms are good sources of work, but they are in the same boat as you hope to be in someday…too busy to do some of the work themselves so they need some help. Their goal, much like yours, is to bring in as much work and money as they can handle professionally without paying out any more than required. This is business priority number one. If they don’t have the work to spread out neither will you. But do not let this deter you from this alliance, it can be a good source of income at times and the comradeship of working and talking with someone else in your line of work is a tremendous opportunity to continue your education and build your company name.
Tools of the Trade:
You will need to invest in a good computer, with as much memory as you can afford, and software to do your takeoffs (there are so many that I have used and experimented with, and more are being developed it seems almost yearly.) They can be expensive, but they will be needed. Find what’s in your budget but make sure it can do all that you may be required to do for your clients. Two or more monitors are a big plus, you will also need software to write proposals, generate invoices, and enter your calculations. Many cloudbased programs can be utilized to
run a professional business such as FTP sites and storage sites. But as your business grows you may need to go beyond the free storage they offer to newbies and pay more for the additional storage.
Money & Freedom:
This is why you want to be an entrepreneur, right? Good; be ready for the mountains and valleys that are associated with your goals.
Making money that allows you to pay your bills and maintain your lifestyle is the ultimate goal. Perhaps you have been accustomed to your employer providing a steady paycheck during your estimating career…this will change, be ready. You will have many “tire kickers” that will call on you to pick your brain about what your fees are and what you may charge based on their description of the project that they hopefully provide clearly for your fee.
What about your fee? This is something that you will need to have in place almost immediately. What and how you charge will need to be defined. By the hour or by the page is a common way to set your fee. Another way is to review the drawings and specs and provide a “not to exceed fee” based on your experience and gut feeling. If you go over that time, you will not usually get additional compensation.
Be warned there is more competition now than there was five years ago when I first opened my doors. There are many companies out there vying for the position of providing takeoffs to your potential client. Many of them are now in the market from other areas of the world, especially Asian countries; and I don’t need to tell you that they charge much less than what is fair here in the U.S. The increased competition can be attributed to many more takeoff software companies providing takeoff software for less money, which allows more estimat-
ing services the ability to provide takeoffs. The economy is a global one now and I believe will not be changing so, therefore, you will now have increased competition for your services from all over the world. I am not saying that they will or will not perform the quality of work that you provide but the opportunities for your client to shop a bit more for a better rate are there.
Creating some samples of your takeoff services to submit along with your proposal is a good idea to show the quality of your work. If your goal is to make as much as you did with your employer this will take time. Have some financial reserves to fall back on, I would recommend at least six months’ worth. Having a partner in your life that contributes to the household finances is a huge plus while you build your business and clientele.
Unless the client is someone you have a history with and will pay you your full fee within 30 days, you should have in your proposal/contract the amount required as a retainer or down payment. If they like your sample work and your credentials, they should have no problem paying for this up front. You can request the balance to be paid upon completion and sometimes you will get this, but the construction industry revolves around the 30-60 and sometimes 90-day pay cycles. You may need to prepare for this. You may not get paid for a while.
A thorough contract/proposal needs to be developed to protect you. Have a lawyer assist you with this; this is a very important necessity. There will be some clients clear across to the other side of the country, much harder to drive there and pick up a check.You may have to take credit cards or start a PayPal account to be able to get that retainer in quickly, especially if they are in a jam and need your work back quickly.
Now there are those that I call “kitchen table” estimators that work from home during the times they are not working for their employer during the day and getting that steady paycheck and benefits. These sources are very tough to compete with... much like the plumbing company that has to compete against a fireman that does plumbing when he is not fighting fires. Overhead is just not there, and the profit motive is not as important! Why should it be? They have a steady paycheck with benefits. They can afford to stay just busy enough to make a little extra scratch.
If this is your goal, it is not the same as working full-time in your business. You can certainly try that angle. But when your client calls on you to assist them in a project that needs to be done by noon tomorrow, and you have a bid due with your employer the next day, this already puts you at a disadvantage; and you may have just lost this client for good.
I would also advise against calling on these “kitchen table” estimators to assist you when you get busy. I tried this when my business was starting to pick up and came to regret it. When I need to know something submitted from this source and I receive a response such as “Hey can I call you back? My boss needs me to get an estimate done today “—this is not what you need to hear. You have your client that needs some clarification right away on the scope that this source assisted you with, and you can’t get that answer. How does this affect the image of your company?
Other money matters that need to
be considered are as follows.
Support: Accounting services, legal services, industry memberships. If a portion of your services is providing estimated costs along with your takeoffs, you will have to invest in outside cost databases or maintain constant updates on materials and labor rates for the area you may have to assist with. Have a source for this in case you are asked to help out in another state.
Taxes: This cannot be avoided, both federal and state taxes need to be paid. Set aside at least 25 to 30% of your earnings for this.
Health Benefits: If this is with a significant other, you have an advantage over others. If not, this is a big-ticket item that will be due every month.
Retirement / Savings: This is not always on the front of your mind but you need to eventually address this or all your hard work will not amount to much other than paying the bills.
Office Supplies: Computer and cloud-based storage systems for all your files and client work.
Workspace: Will you be working from home, or are you planning on leasing office space? Not everyone can concentrate in their home environment, this will be something you may need to adapt to.
Freedom will be a lot different than you may be currently used to. There will be times when you will work late into the evening or on weekends. Scheduling vacations or holidays can be a bit of a challenge. Remember
the well-paying client that gives you a lot of work may be calling on you at the last minute to assist them.
The client is your bread and butter; telling them that you are leaving for a few days with the family for holiday just may jeopardize your ever getting another job with this client. You may be able to take your laptop with you and do the work on the getaway, but you just lost that freedom that you thought you were gaining by working for yourself.
In summary: I am not discouraging anyone from starting an estimating business, go for it if your life is lined up to do so. There are many successful estimating firms out there. I had a great five years of being in my estimating business and will never regret it. I learned so much and interacted with so many great companies, associations, and individuals.
The increased competition with lower rates, the up and down economy, and this time in my life when I need to get very serious about my retirement have all played major roles in my decision to go back to work for a solid company with a steady paycheck and benefits.
I take this experience with me and don’t regret it. I wish you luck and success if you decide to take this career path; you will need it
Carl Cathcart CPE Estimating cpeestimating@gmail.com
