The AWIC Scoop

The 5 estimating mistakes costing your building business – and how to fix them

by Amanda Bulow on The Good Builder

Estimating a job is a critical part of any project and getting it wrong can lead to financial and reputational damage. While many professionals have their methods, certain common mistakes crop up time and time again. Here are the top five mistakes people make when estimating a job, and tips on how to fix them, or even better, avoid them.

1. Using m² Rates

This approach may seem convenient, but relying solely on m² rates is dangerous. It often leads to under-pricing because it fails to consider the unique complexities of each project. Every job is different, and m² rates are far too simplistic to account for variables like site conditions, client preferences, and forecast pricing increases.

Before going to market, conduct a comprehensive pricing exercise. Investing a small amount with an experienced estimator or procurement contractor to assess where pricing truly sits. This upfront investment could save you tens of thousands in underestimation errors.

2. Ignoring the Pricing Cycle

Many don’t realise there is a pricing cycle driven by supply and demand, seasonal trends, and material costs. Disregarding these cycles can result in outdated or inflated pricing in your estimates.

Keep a record of those price rise notifications that land in your inbox. Track them in a spreadsheet or, better yet, use a reliable estimating program to keep a historic record. Understanding the pricing cycle allows you to anticipate changes and adjust your estimating.

3. Not Knowing Competitors’ Standard Inclusions

Failing to understand what your competitors include in their offerings can leave you at a disadvantage. Your clients may perceive less value in your services if they feel they are receiving more elsewhere. 

Research your competitors’ standard inclusions. Then, customise your offerings to stand out. Being aware of the market ensures you’re not inadvertently overpromising or underdelivering.

4. Overlooking Negotiation Opportunities

Negotiating goes beyond pricing, there’s more to it than just the numbers. Delivery timeframes, payment terms, and after-sales service are all opportunities to improve your margins and strengthen client relationships.

Speak to your suppliers on a regular basis. Call them for no other reason than to see how they are going. Not just when there is a problem! These conversations build trust and often uncover new opportunities.

5. Undervaluing Your Team

Your tradespeople, suppliers, and internal staff are your greatest assets. Yet, many underestimate the importance of recognising their contributions. A disengaged team can affect your project’s success and your bottom line.

Foster a positive team culture, it’s not a new concept but is often undervalued. Small gestures like site BBQs, an esky of iced coffees for the team on site, or an occasional early finish can significantly boost morale. A simple “thank you” goes a long way in making your team feel valued and appreciated.

Final Thoughts

Mistakes in estimating jobs can cost you more than just money—they can harm relationships, tarnish reputations, and hinder growth. Avoid these common pitfalls by being proactive: invest in accurate pricing, maintain relationships with your supply chain, and respect the people who work with you (not for you) to deliver exceptional work. When you approach estimating a job with diligence and care, the rewards speak for themselves.

Amanda Bulow is a construction industry professional, and founder and CEO of Awesome Women In Construction: amanda@abulowconsulting.com.au 

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