Adjusting quantity takeoffs for the Real world with example
Its not enough to have theoretical knowledge and estimating software to do accurate takeoffs. A lot of things that need to be done come with real world knowledge. Basic takeoffs need to adjusted to be more accurate and in line with real world usage / requirements.
I will use a Paint quantity takeoff as an example of how to do takeoffs and adjust quantities.
First - The Basic Takeoff
Calculate Gross Surface Area - First calculate the area of the walls, ceiling, floors etc. i.e. wherever paint is being used. This needs to be separated by type of surface and type of paint being used.
Convert to Liters of paint - You need to have an idea of how much paint is required per Sf of surface. Hopefully this is backed by real world data in your own paint jobs. Of course you can google it to get an basic estimate or talk to someone with experience. This might also differ by type of paint being used and the surface being painted.
Add waste - The bigger the job and the bigger the area being painted, the smaller percentage of waste needed probably and vice versa.
Click here to know about Paint Takeoff Services.
Now Adjust - When being less accurate is actually more accurate
This is one of the less talked about aspects of estimating. Sometimes you need to be less accurate on purpose. This might sound ridiculous but its actually common practice and necessary.
Because material quantity is only one of the costs that go into a job. Time to estimate, labor costs, margins, risk, overheads are all significant costs as well.
Trying to be 100% accurate in material quantity may actually lead to higher inaccuracy in the other costs of the project or the business.
Lets take each of the other cost one at a time to see how it changes the way we estimate.
Time to Estimate - Some jobs may have the same height for every wall in the project, use the same type of paint and have the same surface material everywhere. As you can imagine this is a simple and quick job to estimate.
On the other hand image the opposite scenario. Many different wall heights, surfaces and paint types. Should you measure and note down the length of each wall separately to multiply by respective exact heights to calculate exact gross surface area?
Maybe. There is a cost to the time of an estimator, even if its you the business owner. Lets say you add 5% waste to material quantities on every project bid then potentially sacrificing 0.5% accuracy may be better than the alternative. Also consider that material costs may only make up 25% of final bid price. Plus there is a deadline to submitting bids. So putting too much time on one bid can mean not being able to make other bids.
The alternative would be to group wall heights within a certain height range and use an approximate average height for them to calculate SF. Given the various costs and opportunity costs described above, this may be a better way to estimate.
Labor costs - Consider painting a number of small separate bulkheads vs. painting a big wall. Per SF labor productivity would probably be much higher in painting the big wall.
The bulkheads on the other hand involve a very high, cost of labor to cost of paint ratio. To the point where the height of the bulkhead (and the amount of paint needed) may hardly matter.
In such a case bulkheads may be taken off as a group only in Linear Feet (LF). And the cost may only be calculated in terms of labor plus a small % added for paint costs and not converted at all in SF or liters of paint.
Margins, Risk & Overheads - In bigger, lower margin jobs it is more important to the get the quantities more accurate. The risk or potential loss is also higher. In smaller, higher margin jobs its more important to account for overheads and other business costs thus slightly reducing the need for accuracy. Also waste as a percentage tends to be higher in smaller jobs and labor productivity can also be lower, further diluting the need to be very accurate in the quantity estimate.
More expensive products also come with greater risk but may come with greater margin as well. They may need to be estimated with higher accuracy depending on the project conditions and usage.
ConclusionThe aim of estimating is not exactimating or achieving absolute 100% accuracy. The aim is to win more bids at a profitable margin. The approach needs to be holistic. Feedback from job execution should be made available regularly to the estimator or estimating team.
The discussion between the project manager and estimator should be constructive and not accusatory. Any deviation from estimated usage to real world actual usage should be used as an opportunity to learn from on both sides.
There are other costs besides material costs. In fact other costs can often outweigh the material costs depending on the project or item. The material estimate in these cases needs to be adjusted to help produce a more accurate final bid with desired margin considering all the costs including labor and overheads.