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June 16, 2020

Written by Ari Greenbaum, co-founder of conXpros

If you are not providing your customers a modern, clear and detailed estimate, you are likely losing bids to your competition. The good old days of being able to jot down some numbers on a cocktail napkin or scrap piece of paper and win home improvement or home service jobs is a distant memory. Even if you are using the more professional carbon copy sheets, you are setting yourself up for missed opportunities. We live in a fast-changing world that has practical technology at our fingertips. Additionally, the homeowners you are serving are accustomed to the technology driven world we live in, including the ones that are from older generations such as baby boomers. To effectively cater to ALL homeowners in today’s world, you must get with the times and deliver a great estimate to be competitive. In this article, I will share some ideas that should be included in the estimate itself (even using modern technology, not all estimates are created equal) as well as a few sources you can find the right system for your home improvement contractor business.

Getting started:

Before you can provide an accurate, fair and clear estimate, you must first do your homework. There is no excuse for a professional in any business to be unaware of the critical information necessary to call themselves an expert. To get started, you must first know your product inside and out, know the cost of supplies & materials, be familiar with the competition’s pricing and offerings, understand the time necessary for the work,  and potential “issues” that may be uncovered during the project. If you are not armed with this knowledge, you are often shooting in the dark. Perhaps you are hurting your profitability, your ability to be competitive, or costing yourself jobs due to a lack of expertise. Fortunately, none of what I just listed is too complicated to figure out. There are many ways to do a competitive analysis. Go to the supply house (or online) to learn prices of materials. Engage a “mentor” that can help guide you and answer many of these questions. It is your business, so make it your business to be the expert! In addition to the knowledge base, it is imperative that you take the time to properly examine the project, measure, take pictures, and look at every detail when you are in the customer’s home.

Now that you have the info, use it to create a winning estimate:

When I first came to Atlanta and purchased a home, we had some remodeling and updating work that needed to get done. We met with a few contractors regarding the work. All were professional and had good suggestions for what we desired to accomplish. They were not all equal, but close enough that the deciding factor came down to what they provided in a written estimate. Granted, this was 10 years ago, and technology has come a long way since that time, but what won us over would have been the same in a written or electronic version of an estimate. 2 of the 3 contractors we received bids from were remarkably similar. They both listed the basic “punch list” of the overall project and offered a price for the work. The other one stood out to us and ultimately it is why we hired him. He took the time to be detailed in the estimate. Literally, he line-itemed everything with the material cost and the labor cost for each piece. He also gave what he called the “maximum all-in price guarantee”. In other words, the project may come in under this amount, but no matter what we would not pay a penny more than this amount regardless of anything that may come up during the work. This level of detail and confidence that he knew exactly what the project would cost (and if he was wrong, stand behind the price quotes) is what impressed us the most. Close to $100,000 later, we were thrilled with the work (and referred others to him) and he was enjoying his added revenue and profitability. By the way, he was the highest bid of the 3 we received. This did not bother us because of the confidence and clarity I previously mentioned.

I hear stories regularly of homeowners being quoted an amount from a contractor and when the project is done and payment expected, the bill is significantly higher than what was quoted. This happens so often that many homeowners are skeptical of contractor quotes before they receive them. Personally, and professionally, I believe in transparency. This same belief fuels what I suggest an estimate should look like. Thankfully, there are many software options available that make creating detailed and itemized bids simple for any user. I will share some of the options below, but first let’s cover what should be in the estimate. If it is a simple project that does not have many pieces, simply detailing what is needed will be enough. However, when there are multiple pieces of a project, having headings for each section and then detailing within each section provides the clarity for the homeowner. For example, if you are estimating a changeout of a central A/C unit, there are many pieces of the project. There is the furnace, condenser (inside and outside), ductwork, and safety. You can simply price out the whole job, or you can get detailed with each section. For the ductwork, detail each item; the plenum, added vents, new trunk line, etc. Don’t go overboard with every nut and bolt. Small items like these can be grouped into a single line to avoid getting too carried away in the detail. It is also important to factor in all aspects of what may come up. For example, when I would estimate roofing projects, I would always include extra decking, shingles, drip edge, etc. for every project. I built this into the estimate, so if there were any surprises when the old roof was torn off, I was prepared and did not have to go back to the client asking for more than the estimate quoted.

You are in business to make money. It is important to keep profitability and margin in mind when creating an estimate. If you are great at what you do and your product is exceptional, then you deserve to get paid for it! This is where competitive analysis comes into play. Of course, you do not want to price yourself out of the game, but you definitely do not want to be the low bidder either. Offer an initial estimate on the higher end. If you do not ask, they can’t say yes. If the price is an issue, it also allows you to negotiate while still maintaining profitability. It is equally important to understand that the goal is NOT to win every job you bid on (that would be unrealistic), rather win the jobs that you want to win. In other words, the ones that will keep you profitable not just busy So, don’t be afraid to stick to your guns and say “no” to the customer. By maintaining this level of quality and image, the referrals you receive will not be referred to you because you offer the best price, rather because you are worth every penny you charge. When providing the estimate to the homeowner, it is a good practice to provide diagrams or pictures (or links to them) to help the client visualize exactly what you are going to do for them. If they can see it, they will want it.

Use technology to your advantage:

As previously mentioned, with the availability of affordable estimating software, there is no excuse to ever put pen to paper to create a winning bid in 2020. There are many options out there, and you need to do some research to find the right ones for you. Some will also have the ability to enter information and measurements through an iPad or tablet while in the home. Some will allow you to create the visuals for the client. Others will also serve as a CRM that can help manage your lead generation clients as well as other sources. Invest the time to compare a few options and benefit from having the right tool to estimate like a pro. Here is a list of a few estimating and bidding software options available, but there are plenty of others out there:

Service Titan (great for home services)

Housecall Pro (great for home services)

Buildxact (ideal for Remodeling)

Houzz Pro (ideal for Remodeling, roofing and other large projects)

JobNimbus (all around)

Jobber (all around)

The EDGE (ideal for roofing, flooring, & painting)

The bottom line, you need to set yourself up for success. There is nothing worse than doing a fantastic job presenting your services, knowing you are the best option to meet their need, but losing the bid because the competition was better at the estimating/bidding game. Bidding like a pro will help you to win more jobs. Technology makes it easier, but you have to do the work. Get out there and be successful!


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