Friday, April 11, 2014

How Accurate Is My Quote?

You've all learned why the Free Estimate needs to die.

With the Free Estimate gone, what fills the void vacated by all that Free Estimate foolishness?

A Quote or Price for the Project, that's what.

So what's the difference between a Free Estimate and an price or quote?

Well, to start with, creating a Price or Quote for a project requires you to work with someone who will spend time, use their expertise and understanding to assess the risks and challenges, and then determine the material and labor requirements required to make your project a success.  
Most customers are unaware of what the project costs are and would like to have the flexibility to adjust the scope so they can control the cost. Being able to move markers as the design progresses eliminates a condition called "Over Design" which occurs when the designer creates a product the customer is unable to afford.  
So how do you do that?  Price your project at intervals as the design process for your project matures.

Processes And Pricing

Your project documentation is used to define, clarify, and describe your project's scope, material requirements, and configuration.  Development of your project's documentation is a four step process and looks like this:
  • Concept
  • Schematic
  • Design
  • Construction Documents
You can have your project priced at each of these intervals realizing the accuracy of the pricing provided reflects the accuracy of the documentation provided for the stage of the process priced.
Process Pricing

To help you understand what I mean, refer to the Process Pricing image. The darker the color, the more precise the pricing provided.

For example, because more than one CONCEPT is prepared for your project, the prices here vary the most. Materials are guessed at as well as the scale and scope of the work. 

As you move from the CONCEPT to the SCHEMATIC, the pricing tightens up more as the scale and scope of the project become more defined.  Room sizes are known, some material decisions are made, and the location and size of doors and windows are provided.

The DESIGN stage of the process is quite a bit more accurate because you have cabinet layouts shown, flooring types identified, and elements such as trim and door style identified. (It's at this stage you typically sign a contract with a Design-Build firm to build your project)

The COMPLETED DOCUMENTATION process provides you with the more accurate pricing levels of all the processes because everything is specified, including how the work is to be performed. (It's a this stage where all the Change Orders are issued, before the project begins).

As you can see, as the your project's construction documentation increases in its level of detail, ambiguity, assumptions, and unknowns are removed. The accuracy of your pricing is directly tied into the completeness of the documentation you provide.
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