Cost Estimating

Simple and Comprehensive

Energy wise residential remodeling has many variables, so a simple yet comprehensive system for job cost estimating is crucial to selecting properties and enabling the kinds of energy retrofits that will increase your profit potential. 

For initial evaluation, there are several factors to consider.  For in-depth analysis there are a variety of free and/or economical software solutions, from Excel spreadsheets and Google Docs to SmartSheets and CostEstimator,  to assist your establishing and reviewing a budget.  GEE provides articles and posts, webinars and videos designed to make on site and in office calculations easy and accurate.


Importance of the Cost Breakdown

Keeping accurate records of hard and soft costs can mean the difference between profit and loss. Here are a few key points to consider:

1.  It’s hard to hit a target that you dont have. “Surprises” are almost never in the happy direction.

2.  It’s hard to hold your crew and subcontractors to a budget unless you really have one.

3.   Your team will enjoy beating budgets and timelines and you’ll enjoy rewarding them for excellence.

4.  You must always know your exit before you enter.  The cost breakdown connects the two and gives you a measurement of how your plan is working.

Tracking expenses by Cost Codes is crucial to quickly and consistently identifying expenditures.  The numbers and category titles vary from system to system.  GEE’s are the following:

1.   DEMO & TRASH HAUL     2.  LANDSCAPE     3.   CONCRETE    











Other Costs    Contingency 10%    Insurance    Utilities    Taxes

Interest    Other    Total

In regards to keeping track of costs there are few choices.  Notebook and/or  Checkbook.  Excell SpreadSheet and or Google Docs. SmartSheets and/or Specialty Construction Software.  QuickBooks or other accounting software.

In all cases you will want to cost code all expenses, from hours worked to Home Depot purchases according to your cost code list and the address of the project. Good rules of thumb is to open a business checking account named with the address of the property.  Get wallet sized checks with carbon copies.Discipline yourself to pay everything with those checks. Your CPA will love you. When the house is sold, close out the account and start another one for the next house.

You want to minimize hourly labor by using quali?ed subcontractors as much as possible.  But if you have any hourly labor design a custom time card that makes it easy for employees to give you the correct information. Most hourly employees will work for the subs or the  general contractor.   The general contractor will probably have a similar system. Time Cards with cost coding are to be done daily.  After the end of the day the memory seems to fade.  (This memory fade almost never results in a lower or more accurate number).

We have found it best to subcontract as much work as possible.     This is really the only way to control your costs.    After all the bids are in, you will know your costs almost exactly and your pro?t–(if you sell the project as you have planned)

Subcontract all the “Big Chunks” of work HVAC, Roof, Concrete, Tile, Granite, Paint, Windows, Drywall, Insulation, Stucco, Plumbing, Electrical, Floors, Landscape etc. Then Contract a “General Contractor” to supervise all the subs in and does all the rest of the smaller jobs.  This should be a ?xed number so that all your costs are then ?xed.

The General Contractor, either himself or with his employees, does everything not done by subcontractors.  Some examples might be: (some of these might be subs) Board-Up and Re-Keying, Demolition and haul to Re Store Finish Carpentry, doors, casing, base, crown etc. Cabinet install,  Hardware install Appliance Install, Mirrors, Fixtures And mainly supervise all the subcontractors.


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