Estimate vs Actual Cost

Discussion in 'Business Operations' started by PerfiCut L&L, Jun 1, 2006.

  1. PerfiCut L&L

    PerfiCut L&L LawnSite Senior Member
    Posts: 458

    When your do and estimate for a customer, main on hardscaping project apposed to lawn care, how often does your estimate match your actual invoice?

    On a few of my latest projects ive under estimated by about 10%, some costs due to unexpected equipment issues, some due under labor estimation.

    Some costs, I will eat if its a simple oversight on my part, but the labor costs I have to pass on to the customer. Needless to say, they dont like it. But if I spend 28 hours on a job and not 20 like estimated, then the bottom line is I spent 28 hours doing the job. I have to pay my guys, so I need to get paid for their work.
     
  2. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    Not sure if I understand correctly, but if you estimate 20hrs and it takes you 28hrs then you need to learn how to estimate better. If I were a customer and that happened I would be pissed and assume you did it on purpose. Throw in a buffer or take more time when you quote something to get more insight.
     
  3. PerfiCut L&L

    PerfiCut L&L LawnSite Senior Member
    Posts: 458

    Thanks for the insight, and for the most part our estimates on are prety darn on the money. In the recent case, we ran across a few unexpected circumstances, mainly with the materials we were using and so we had to make a few modifications, and adjust accordingly. To do so, required additional materials of another sort (which I ate the cost on) of course the customer was kept abreast as to what was going on, and he was ok with the changes. But the added labor was added to the invoice and I think that struck a nerve.
     
  4. lsylvain

    lsylvain LawnSite Senior Member
    Posts: 777

    I almost always end up over estimating my time so I have rarely had your problem. An estimate is exactly that, an estimate so if you are off you are off bill accordingly. If however the error was your fault ie. you forgot to include the time on a particular part of the job like missing an entire area of the yard you should take that into consideration when creating your final bill and perhaps eat a large portion of that cost, but if you are talking about say putting in a retaining wall and you dig back into the hill and hit a 4 foot thick peice of rock that you have to dig out that isn't your fault and the customer should pay for it. In the later case though you should have informed the customer the second you hit that rock to let them know of the issue.

    my 2 cents
     
  5. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    how do you feel when you take your truck in and they tell you it will be $250.00 to fix, and when you go to pick it up, it ends up being $400.00?
     
  6. BCF

    BCF LawnSite Member
    Posts: 107

    The only time the final bill is more than the original quote is when I run into hard digging, but I have that clause in my contract. Otherwise, it stays the same, regardless if I screwed up my estimate.
     
  7. Dirty Water

    Dirty Water LawnSite Fanatic
    Posts: 6,794

    We will often estimate the job, but its only a estimate, our jobs can vary widely because we do so much digging.

    We give the owner an option of a fixed bid, or a open ended estimate. Of course the bid is higher.

    Most people go with the estimate.
     

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