How to Avoid the Pitfalls that Can Derail Your Construction Estimates



When you’re in charge of estimating, your teammates—plus your boss and your vendors—are all relying on you to ensure profitability, control risk and rack up wins. But estimating isn’t easy. The bids are complex. The deadlines are tight. The competition is intense. The margins are thin.

When you’re in charge of estimating, your teammates—plus your boss and your vendors—are all relying on you to ensure profitability, control risk and rack up wins. But estimating isn’t easy. The bids are complex. The deadlines are tight. The competition is intense. The margins are thin.



Read on to discover three sneaky pitfalls that can derail your construction estimates and cost you—and your company—success. Plus, get the winning strategies to overcome them and help you gain a competitive advantage.



PITFALL #1: Lack of standardization

If you don’t have a standardized estimating process, it’s like driving without a map. Every estimator on your team is doing their own thing. While there may be advantages to each person’s way, when everyone puts their own spin on things, you’re bound to have inconsistencies. And in estimating, that can lead to big problems.



For starters, these variations make internal reviews more challenging and error prone. Plus, when you don’t have a consistent process for creating estimates, you also lack a consistent way to review them. If you did make a costly mistake or omit an important detail, you’re more likely to miss it.



Don’t overlook the hidden dangers of using spreadsheets. According to several research studies, it’s estimated that each individual cell of a spreadsheet has a 1% to 5% chance of containing an error. These numbers may seem small, but they can quickly add up. Your estimating spreadsheets probably contain dozens—if not hundreds—of individual cells. And for each cell you have, your probability of an error is multiplied. The more cells you have in your spreadsheets, the greater your risk of making a mistake. And the risk grows even higher when those cells contain information or calculations that depend on other cells.



The statistics don’t lie. Several independent studies conducted by leading commercial auditors concluded that ~94% of spreadsheets contain errors. To make matters worse, should you be among the vast majority of people that will make a few mistakes, the odds of catching them are low. Nine separate spreadsheet experiments, involving more than 1,000 participants, found that the average error detection rate was just 60%.



These errors obviously hurt your margins. But beyond the physical costs, there are the costs of missed opportunities. Estimating is heavily influenced by tight timelines. When you’re slowed down by a clunky and inconsistent process, you lose valuable time and productivity. You end up forfeiting the ability to value engineer your estimates and you may be unable to respond to as many opportunities.



A standardized process can help you collaborate more effectively and create the consistency needed to drive more wins. By relying on a consistent methodology, you’ll minimize mistakes and ensure that all of the key elements are included in every estimate, every time.



Database-driven estimating software allows you to create a repeatable estimating process built on your own best practices. By relying on a common coding structure, you’ll not only ensure every one of your estimates is prepared with the same critical components and level of detail, you’ll be better able to complete reviews consistently, too.



When you standardize your estimating process, you:

  • Minimize costly mistakes
  • Leverage repeatability for greater efficiency
  • Ensure estimates are complete and consistent.



In the end, you’re able to produce more estimates, more quickly, giving you the precision and speed needed to gain the competitive edge.



PITFALL #2: Relying on tribal knowledge

You’ve invested a lot in your senior estimators. And you rely on them to win projects. Arguably, their expertise is one of your company’s greatest assets. But it also presents one of your biggest threats. In an increasingly tight labor market, the likelihood of losing talent is high. Even if you’re able to retain your best and brightest for years to come, continuing to remain comfortable comes at a cost. For example, an employee who makes $100,000 per year can “walk across the street” and get $115,000 to $120,000—if not more.



If you fail to capture a top employee’s tribal knowledge (expertise) before you lose them, it can come at a high cost to your business. In addition to the hard costs—which could be as high as 2X of the cost of one year’s compensation for that role—there are also indirect costs associated with losing a seasoned member of your team. For example, it can easily take two to three months to replace a knowledge worker, not to mention the time you’ll invest onboarding a new hire and getting them up to speed. While the loss of intellectual property (aka tribal knowledge) may not be as easy to quantify, there’s no denying it comes at a price. Should your best estimator go to the competition, you’ll feel the effects directly.



Even if other circumstances are to blame, it’s still a significant loss. An employee that’s been at your company for years has had experiences, developed efficiencies and acquired knowledge that’s extremely valuable, maybe even irreplaceable. If that knowledge remains known only to them, they take all of that knowledge with them when they leave.



So how do you take control and make sure this all-too-common problem doesn’t trip you up?

  • Leverage database capabilities to capture the tribal knowledge of your most experienced estimators and share it across your entire estimating department.
  • Use estimating software that supports the creation of assemblies that harness your best practices and make them repeatable.
  • Make sure it facilitates collaboration by allowing multiple estimators to work on the same estimate at the same time, each sharing their individual expertise.



You don’t need to lose valuable ground—or sleep—every time an employee leaves. When you make the switch to database-driven estimating software, you’re able to capture and leverage the experience and best practices of your most experienced estimators. An estimating solution built on a robust database allows you to collect and protect the knowledge previously known only by each individual and consolidate it into a consistent, automated process. By doing so, you’re able to:

  • Protect your intellectual property/expertise
  • Retain your investment in key people, even if they leave
  • Drive better, faster performance across your entire team.



PITFALL #3: Insufficient tools

If you’re looking to win bigger deals, you face increasing demands. Highly customized bids and reporting processes have become table stakes if you want to be awarded the most prized projects. As if struggling to keep up with your internal reporting requirements isn’t enough, you now must meet the individualized demands of owners. Because large owners are usually accountable to a variety of internal and external stakeholders, this means you need to tailor your estimates to a variety of metrics and details.



The things that matter most to investors and lenders, for example, are different from the priorities of a project oversight or audit committee. To gain traction, you must create the personalized estimates and reports that they expect. From the start of each estimate (conceptual bid) to its finish and beyond (post-project audit reporting), your ability to respond to each group’s needs and interests presents a chance to differentiate yourself.



If you’re relying on spreadsheets, you’re setting yourself up for unnecessary challenges. You need to be able to present customized and consistent estimates to clients.To meet today’s owners’ individualized requirements, you need a flexible database-driven estimating solution that:

  • Empowers you to quickly adjust your estimates
  • Organize estimates to meet your internal reporting needs
  • Customize estimates to meet the specific reporting needs of your clients



You also need your estimating solution to accommodate your existing practices and current tools. You don’t have time to change the way you do things. You need a solution that allows you to estimate the way you want to and that plays well with the other software you already use.



The solution?

Trimble WinEst is a highly flexible, database-driven estimating and quantity takeoff solution that addresses all phases of the estimating process, from conceptual budget to detailed final GMP estimate. Powered by advanced database technology, WinEst allows you to:

  • Standardize and automate your estimating methodology
  • Capture the best practices of your most experienced estimator
  • Adjust and organize estimates to meet internal and client needs
  • Drive productivity and performance across your entire estimating department



No matter where you are in the estimating process—from initial conceptual budgeting to specialty execution—WinEst Essentials provides estimators the tools they need to confidently make profitable decisions that are based on real-world data in one value-packed subscription.



With WinEst Essentials, you get access to Trimble’s WinEst estimating solution, integrated digital takeoff, up-to-date cost databases, drawing, and document manipulation capabilities, and collaboration tools. Combined, these provide stakeholders necessary visibility throughout all phases of the estimating process, allowing you to win more work through efficiencies in estimate creation, precision and shareability.



The WinEst Essentials subscription reduces error and increases efficiency by managing everything related to your estimating workflow, getting you to bid day confidently, accurately, profitably, and with a competitive advantage.



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