This is a skilled industry. Estimates are an expression of experience and knowledge, although that can be hard to tell.
Estimates are, by definition, inaccurate. They are off-the- cuff equations based on inaccurate or incomplete information. Estimates are damaging to the industry and foster suspicion and frustration for both contractors and their clients.
The creation of the free estimate comes from the simple service industry where the product or service is of a known quantity or scope. A plumber can give a very good idea of the cost of replacing a gas water heater or to install a tub and fixtures because it is a simple job that has known parameters. This is not true of remodels or new construction.
What we do is always bespoke work and we have to bring a considerable number of people and specialty contractor on site to create work at a high expectation of quality without the benefit of models or prototypes.
We have a process of creation that begins with a consultation. The consultation creates an initial scope of work that includes the client’s hopes, project details, and the budget.
Design, specs, and schedule complete the proposal. This includes all the furnishings and fixtures, design elements and aesthetic details necessary to build the project. The more complete the list of specifications is, the closer the proposal will be in cost and schedule.
Once construction begins there will inevitably be changes to the project. New ideas, new products, different considerations come into play. It is common to have new thoughts as the structure takes shape. With both new and remodel construction there will be unforeseen work that needs to be done. Changes are dealt with through a Change Order process where the issue or idea is brought up, the cost and change to schedule is presented, and then the work is done. To mitigate surprise at changes in cost we often will present an expected number for what think the change in price will be. This may be as low as 5% of the total, or as much as 30%, depending on the complexity of the project and the clients and/or architects involved.
Creating a proposal requires the participation of many people and takes considerable time. The quality of a proposal is directly related to the thoroughness of its preparation. We often have to bring a dozen specialty contractors through to look at larger projects. Small projects and furniture may require prototyping or sample designs. Proposals, estimates, these are documents where the value is derived from the experience of the estimator and the quality of the plans. The old saw “you get what you pay for” certainly applies to estimates.