How to start a commercial estimating department

Project management authority H. Kent Craig offers steps on how to start a commercial estimating department

In my September column, I outlined what not to do when trying to set up a commercial HVAC/plumbing estimating department. Using the worst remembered anecdotes and emotional souvenirs, I reviewed the many possible reasons as to why many new estimating forays fail: envy, impatience, under capitalization, stupidity, avarice, jealousy and greed. However, it is possible to create an estimating department that will pull its weight from its inception on (although I’d give it a good six months in a weak economy). To create such a department, you just have to follow a few simple steps, but they do require the guts of a high-stakes poker player to see them through, especially if you’ve never done this before.

The first thing you need to understand is that when it comes to hiring the person that will lead your estimating department, you’re going to have to pay them well. To attract the talent needed to make the new estimating department a success, you’re going to have to offer the estimator at least the same base salary you are paying your best project manager. You don’t need to offer him or her job bonuses as you would a project manager, and you shouldn’t mix a low base salary with vague promises of “total job package profitability” either, something even the most green of estimators will see as an attempted con.

If you’re recruiting from outside your local area, you will need to offer a full relocation package, which means paying relocation expenses for up to 90 days, including moving expenses and perhaps spousal relocation expenses too.

Don’t expect your senior/lead estimator to do anything else, but estimate. Don’t expect your estimator to market (though some like to do this every now and then), do collections from overdue jobs and step in and manage jobs if the work load gets heavy because he or she has been successful in making rain for the company.

You can expect the estimator to give you what you would give him or her if the situation was reversed. Do expect the estimator to work at least 40 hours per week with not much over time for an industry-average salary. Do expect him or her to keep a reasonable and accurate record of the number of hours spent estimating every job. Do expect him or her to keep complete job file records for each job, including tick sheets, contact information, material quotes, etc. Do expect the estimator to be able to explain why this or that component or phase of a given job was estimated.

Do give the estimator the quietest space in your office to work in. A senior estimator is like a monk creating illuminated scrolls. He or she is usually not like the back-slapping project manager, twisting arms and necks, or the grinning salesman, working the phones and the bars with clients. An estimator needs peace and quiet to maintain the very high level of concentration needed to keep from making nickel mistakes, which can quickly add up to real dollars.

Do give him or her the most comfortable chair possible. Do give the estimator enough lay-down spaces and racks for the multitude of plans he or she will be working on. Do make sure the estimator’s workspace has more than enough lighting. Do let the estimator pick their office furniture if at all possible.

If the estimator has his or her own laptop, great, but you’ll want to give them a company issued one, so you can maintain a tight control over its use. The same goes for a cell phone. Insist that the estimator uses company-issued electronic tools instead of their own for business.

Do give the estimator a computerized, digital estimating system to maximize productivity. If you don’t currently own one, let the estimator give you suggestions as to what system they prefer and think is the best. It is wise to send the estimator to the vendor’s training programs and seminars, so they can learn about the system. These suggestions may grate on you a little, or a lot for that matter, but they’re all about one thing: productivity.

Sweat the details, but not the small stuff. If your new senior/lead estimator wants to display his or her collection of Jack Daniels collector bottles or Disney memorabilia in his or her office, let him or her do so. If the estimator wants to mark up the different systems on plans using a multitude of crayons, let him or her go for it. If the estimator wants you to buy him or her a certain kind of old-style light in order to see plans better, and if it doesn’t cost a fortune, buy it.

Taking a roll of the dice in deciding to venture out into the world of larger commercial estimating can be breath-taking (not necessarily in a good way), but when you decide at the get-go not to do things on the cheap end, but adequately support your new venture on all levels - not just financial ones - the financial side of the reward equation will come back to you in spades.

Kent Craig is a second-generation mechanical contractor with unlimited Master’s licenses in boilers, air conditioning, heating and plumbing. You may contact him by telephone at 919-521-6895 or via email at [email protected].