2nd Mistake Contractors Make When Estimating Labor for Jobs

Last week I started a series on the 3 top mistakes I see contractors make when they are estimating labor.

The first one was not calculating labor in “full, entire day intervals”. Meaning to fix it, do not bid in partial days. (e.g. 3 and 1/2 days. Round up to 4 days.)

Today I’m going to focus on the 2nd one: Failing to plan for logistics when estimating labor on jobs.

The problem and solution are pretty simple on this one. It can feel like a bit of a head-slapper moment.

But I bet any of us who’s been estimating jobs for a while has made this mistake. ??

Description of the mistake

The basic description of the mistake is:

• you estimateing how long each portion of the job will take you
• Carefully calculate the labor
• Full send

But…

Forgot to take into account that

• this nice big job is an hour away.
• You’ll need to run some special deliveries
• There’s a subcontractor or two that inevitably will take your time to manage

Basically what I’m saying, is I’ve seen many a contractor (myself included) who calculate without error how long the job will take to install.

But they completely miss the labor required for logistics.

On a 10-day job an hour away, with 4 crew members in the truck, here’s what that looks like:

• an hour out and an hour back per day is 2 hours of road time per day
• multiplied by 4 crewmembers, that’s 8 man-hours a day of labor
• multiplied by 10 days…. that’s 80 man-hours!
• 80 man-hours multiplied by an average of $100 per man-hour, that’s $8,000 that got missed!

Do you see how quickly this can suck the profits out of your hard work?

I always like to account for windshield time in the job. (Rather than counting it as unbillable labor.)

Someone has to pay for that labor, it may as well be the client we’re working for during that time.

Other things

Other things can also come up in real life…

Like this one time, a client really wanted us to stack and palletize all the old pavers we were pulling out.

Umm… that takes a lot of labor!

So… add this checklist to your estimating process:

After you’ve estimated the labor required to do the job, have you accounted for the following:

? drivetime

? logistics of running materials (if needed. I prefer deliveries)

? managing subcontractors

? any special requests by the client

? difficult access or not enough space to stage equipment and materials

If you’ve accounted for all of these, you’ve closed off a big potential leak that sucks profit out of your jobs.

You’ve got more than just the “working labor” to account for.

All those logistics need to be accounted for as well.

Contractor Summit

With that, I want to invite you to our Contractor Summit event. At this event, you’ll be in a room with your peers, who are in the grind of business just like you are. And you will inevitably glean and learn things like my tips above at this event.

It just happens by default when you get into a room with your peers and lean in and engage.

Attending industry events like this is one of the top things I attribute my own professional growth to.

It unlocked so many opportunities for me, as well as allowed me to learn from other people’s mistakes and lessons learned, and shortcut my own learning curve dramatically.

This year’s event will be hosted by Jeremy Swihart (JSquared Outdoor) in Dayton Ohio, on October 3rd & 4th. (That’s a Thursday/Friday.)

He runs a top-notch pool and outdoor living space construction company. If you don’t already, you need to follow this guy on Instagram. He’s got a sharp mind and the things he comes up with to make his crews, shop, and production more efficient is amazing.

More details and tickets are here.

The entire SynkedUP team will be there, as well as a bunch of SynkedUP users (and non-SynkedUP users)

Be there.

Your future self will thank you ??

Weston Zimmerman

SynkedUP CEO & co-founder