J. Miller and Company Blog

February 7, 2009

My Father’s Files – Estimating in the “Old Days”

My father, who died in 1977 at a very young 54 years, was a management consultant to airports.  During that time he amassed a huge file of articles, many of which pertain to the construction industry.

A recent finding was entitled “Estimated Costs < Final Costs: Why the Difference?”.  It was written in 1964 by a chief estimator for Bank of America who says boldly “The proper application of the square-foot cost analysis method will result in a ‘reasonable’ estiamte of costs.  Until the reliability of crystal balls is improved …. reasonable estimates are all we have.”

Although the article discussed in great detail the applicaton of a square foot cost estimating procedure, the prospective building was a tilt-up warehouse without doors and windows.  This is not exactly the same building which most remodelers find in tackling a new estimate.

However, the idea is the same:  find and use reasonable square foot estimates for your remodeling projects, differentiating by type of remodel (kitchen/bath/whole house/basement, etc) and modifying based on finish levels (A/B or C).  Put together a portfolio of photographs from recent (within the last 3 years) jobs of the same type,  stating the level of finish.  Protect the owner’s privacy by not including the owner’s name or address nor the finished price for the project.  When discussing a new project with a potential client use the portfolio to help them get an idea of the range of square foot prices and how they vary depending on finish, access, level of detail, etc.

So even though you don’t have that crystal ball the estimator hoped for in 1964, you can still maintain client confidence by focusing on reasonable square foot prices based on real-time history.

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