How to Start a Commercial Construction Estimating Department: Is Your Team Ready for Growth?

Growing into a successful, mature construction company means expanding in more ways than just your field crew. You need experts in accounting to keep your books in order, project managers to handle coordinating the ins and outs of each job, and of course to keep those lucrative jobs coming in, you’ll need estimators.

How do you know when it’s time to start a full commercial estimating department? Let’s do a deep dive on why, when, and how to build and grow a team of estimators.

The Role of an Estimating Team and Its Importance to the Construction Business

An estimating team is the first line of defense against inaccuracies and poor planning for growing construction businesses. Without designated estimators, your company runs the risk of missing out on great opportunities and not targeting the right types of projects for your skills and bottom line.

A dedicated estimating team will have the resources, know-how, and bandwidth to evaluate each potential project for fit, scope, cost, and potential profit to maximize your company’s earnings.

You can divide the task of estimating among employees with other responsibilities, but once your business has grown to the point where you can support a true estimating department, you should consider doing so as soon as possible.

Trained estimators who spend their days doing takeoffs and creating estimates will be much more skilled at these tasks than others who are spread too thin, and your salespeople and field crew can focus in on what they do best, leaving bids to the experts.

Why Are Accurate Construction Estimates Important for the Success of Your Business?

Your estimating team will be able to put together extremely detailed, accurate estimates, and this is where your company can really begin to shine. An accurate estimate means you’re more likely to win the bid, and more likely to finish the project with higher profits.

This is because the more precise an estimate is regarding counts, measurements, and labor hours, the more room there is to adjust markup to your desired profit margins. Good construction cost estimators will have these skills down to a science, and they’ll also excel in the art of balancing the odds of winning with the profits you need.

After all, winning isn’t everything, and you need to know you’ve got folks on your team who can take you to your revenue goals – people who understand the nuances of direct costs versus indirect costs and where those apply.

Where Can You Find Resources for Your Team to Learn about Cost Estimating?

If you’re looking for resources for professional development for a novice team, there are three great options.

1. Learning from a mentor.

The best teacher for estimating is often experience. The longer a person has been in the field, the more they develop their instincts for accurate estimates. If you’ve been the primary estimator in the past, you might actually be your team’s best resource and secret weapon. Train them on your methods, or you might consider hiring someone from outside with experience who can mentor your new team.

2. Traditional cost estimating books.

For traditional learners, a search on Amazon or your local library branch will result in plenty of books on construction cost estimating written by experts. Some even include general guides to material pricing across regions so your team can get a feel for the numbers.

3. Online resources and software providers.

There are a lot of construction websites and blogs out there, and you might be surprised at the great content that’s created by the folks that power some of your favorite tools. Be sure to check out the resources available from platforms like Procore and STACK for the latest industry news and expertise.

What Courses Can Your Team Take to Improve Your Construction Cost Estimations?

If you’ve got some go-getters on your team, you offer tuition reimbursement, or you’re looking for what types of programs to screen for on resumes, take a look at these schools that offer courses and full programs around construction management.

  –  Drexel University

  –  IUPUI

  –  University of Cincinnati

  –  Auburn University

  –  University of Missouri

  –  Oklahoma State University

  –  United States Air Force Academy

How to Start a Commercial Construction Estimating Department

So, you’re thinking it might be time to start a full-fledged estimating department within your commercial construction company. It’s a step in the direction of success, but it can be a challenge to get started. We’ve got tips to help you decide when it’s time to pull the trigger and suggestions on how to get started.

5 Factors to Consider When Creating Your Estimating Department

1. How do you define the construction estimator role?

You’ll need to have a solid handle on exactly what you expect your estimators to spend their time on. Look up job postings from companies that are similar to yours in size and service area to learn how they are defining the position. Will you expect your estimators to liaise with subcontractors and suppliers, or will they be strictly measuring plans and preparing estimates? Will they need to collaborate with other estimators or work independently? Will you need them to handle risk management and make adjustments to contracts, or is that someone else’s role at your firm? Answering questions like these in the beginning will help you attract candidates with the right skillset.

2. Will you hire from within, conduct an external search, or a combination of both?

You might have folks on your field crew who are interested in making a switch to a desk job and who could perform estimator duties well. Or, you might have someone who’s interested but will need training and guidance. Determine how many estimators you’ll need to start based on your level of projected growth, and then build your department with a mix of loyal employees and new hires. Just be sure to seek out an external candidate who has both the technical and people skills to lead a team and mentor newer estimators. You can use these tips to build your all-star team.

3. If you’re hiring externally, how will you find candidates, and what qualifications should you expect?

To find qualified applicants, you can enlist the help of an outside recruiting firm, post on job boards, spread the news via word of mouth, or some combination of these. You should definitely ask your employees for referrals if they have them. Decide what qualifications are absolute requirements versus simply nice-to-haves. Do you need the candidate to have a construction management degree from an accredited university? Are 2 (or 5, or 10) years of demonstrated work experience preferred? You can always make exceptions for a specific candidate, but having these attributes listed out will make decisions easier.

4. How much will commercial construction estimators make at your company?

Do your research by asking any connections you might have in the industry and searching sites like Glassdoor. Job boards like LinkedIn or Indeed will also sometimes post salary ranges. Don’t forget to take into consideration your location – a company in the Midwest will not have the same pay scale as one on the West Coast or New York City, for example. Determine what seems like a reasonable range, and then think about whether you’re seeking highly experienced professionals or junior-level estimators who will require additional training and guidance. If your budget doesn’t allow for an upper-level employee, you might need to recruit people who are newer to the field and plan to support them with your own expertise.

5. How will you make your final hiring decision?

Once you’ve narrowed down your search to a few promising candidates, it’s time to make a choice about who is the best fit. If they all seem equally qualified and enthusiastic, you might consider presenting a small project as a challenge. Does the candidate know what is included in a commercial construction estimate? Ask them to complete a portion of a sample bid or explain what a proposal should look like so you can get insights into their approach to takeoffs and estimating. There’s no need to try and make this a tricky assignment – you’re just looking for someone whose work style meshes will with yours and your company’s.

The Best Commercial Construction Estimating Software: Giving Your Team the Tools They Need to Succeed

Your newly developed estimating team can only be truly effective if you equip them with what they need to do the work. That means providing them with the best estimating software they can get their hands on.

1. Cloud collaboration.

If your team can’t collaborate on the same set of plans, in real-time, you’re at a huge disadvantage. Old-fashioned desktop software is not conducive to today’s collaborative environment. Cloud-based tools allow you to expand your talent pool to include remote candidates, increase teamwork, reduce rework, and get instant software updates with no IT involvement.

2. User-friendly interface.

Your software should make takeoffs faster and easier, not clunkier. Look for a tool with a low learning curve that lets you easily navigate plan pages, quickly find details, eliminate redundancies with hot keys and auto count, navigate change orders with plan overlays, and verify scales for accuracy.

3. Estimating and proposal capabilities.

If you have to jump to a second platform (even Excel) to create estimates and proposals after you do your takeoffs, your tools are wasting your time and opening up room for error. A complete solution will let you leverage takeoff data in the same platform, create unit cost and material and labor estimates, easily factor in markup and tax, and generate professional proposals directly from your estimates.

4. Plan, spec, and document management.

Your platform should help you simplify your document storage and organization, so you’re not spending time searching for contracts or amended plans. Look for a tool that lets you easily upload and store documents and plans from any source, organizes plan pages quickly using folders, has a robust search function, and allows you to classify projects as you see fit.

5. Access to training and support.

The best preconstruction software should be easy to use and also have training and support readily available – if you can’t learn the platform, it isn’t a useful tool for you. Seek out a solution that offers customized onboarding, extensive help libraries and in-app chat options, communications regarding new releases and features, and one that asks for your feedback on their product roadmap and planning.

Download this Top 5 Features Checklist for a handy resource as you research tools.

How to Evaluate Construction Estimating Software for Your Team

Test the Waters

The best way to determine if a tool is going to work for you is to try it out. Most takeoff and estimating software companies offer a free trial so you can check out features and capabilities. The downside to this is that your access is limited to a set period – usually a week or two – and if you don’t have time to try it before the trial ends, you don’t learn much.

Search for a tool that offers a full free version so you can take your time and get your feet wet. Make sure the person who will use the software most gets a chance to test it out and get a feel for it.

Ask about Support and Impact

Next, come up with a list of questions about how the software works, and ask a company representative for a demonstration where you can have a discussion. You can use interactions like this to judge the responsiveness of the staff. Will they be there for you if you need help or training?

Search the company’s website and ask your contact for reviews, case studies, and testimonials from other customers to understand the impact the tools have had on other growing firms. You can also seek out information and third-party reviews on sites like Software Advice and Feefo.

Weigh Benefits against Pricing

When you’re thinking about budget and pricing, be sure to ask about hidden fees, like training costs. Some solutions price their software lower but then charge you high costs for training and support, while others include training in their pricing structure. Make sure you’ll have what you need for your team to get up and running on the new tool as quickly as possible.

Finally, ask questions about what’s coming down the pipeline in terms of capabilities. You want to partner with a solution provider who is constantly thinking ahead and improving their platform, so that as you grow, they can continue to offer you best-in-class tools for your changing needs.

Your Path to Growth and Success

Having a fully functional estimating department will make a big difference in the amount of work your company can bid, the number of jobs you win, and the types of work you go after. Before you know it, you’ll be well on your way to success.

If you’re currently in the search for estimating software, we’d love to partner with you! Give STACK a try now.

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