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14. June 2018 11:32

By: Bobbo Buckley, Software Developer: Cabinotch Innovative Solutions

Effective Estimating that leads to Bullet Proof Proposals - BMG10

When it comes to effective estimating, the words every contractor and sub-contractor dreads to hear is "can you give me a ballpark estimate". If you guess low, it's the only number they remember. If you guess high, you may never see or hear from them again.
"baseball stadium," 1899, from (baseball + park (n.). Figurative sense of "acceptable range of approximation" first recorded 1960, originally referring to area within which a spacecraft was expected to return to earth; the reference is to broad but reasonably predictable dimensions.
My response to this inquiry always started with the statement, the average cost of a ballpark is $750 million, which never failed to produce a laugh, and to open the door to a more serious conversation, mission accomplished.
Don't get me wrong here, I'm not opposed to Ballpark estimates, they are great pre-qualifiers (they get rid of the tire kickers), but I'm not a FAN (see what I did there? Ballpark - Fan) of a single number. I always provided a RANGE like this:
1. The least expensive project we produced last year ran $400.00 per cabinet, and you have approximately 20 cabinets, so the best case scenario is your project will cost $8,000.00.
2. The average cost for all our projects, taking everything from the least to the most expensive projects into consideration was $750.00 per cabinet, you have approximately 20 cabinets, so your project will probably fall somewhere close to $15,000.00.
3. The average cost per cabinet for the most expensive project we produced this past year was $1,500.00 per cabinet, so if your selections align with that project, your project could cost as much as $30,000.00.
This broad range of prices is based on the selections customers made over the previous year (doors, drawer fronts, drawer box type, functional hardware type, wood specie, finish, accessories, etc.), so it's a good number. This is just a small example of the kinds of things we will cover in this session. Sign up now.


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