Master Writing Estimates (2/2): Safeguarding Your Business Profitability and Navigating Change Orders

Contractor Cuts

How can you safeguard your estimates and protect the profitability of your contracting business? Join us as we unravel the secrets to accurate project estimation and maintaining financial health in the construction industry. We discuss the indispensable role of work orders and client engagement agreements in minimizing errors and ensuring transparency. Our focus is on establishing clear processes and expectations with subcontractors to avoid unexpected costs and common pitfalls like miscommunications, which often lead to budget overruns.
Misestimations are inevitable in construction, but how you handle them can make or break your business. We spotlight the importance of transparency and trust with clients when confronting budget variances. Learn how to leverage your subcontractors as partners in identifying overlooked details, adjusting estimates, and managing negotiations to stay within budget while ensuring fair compensation. By addressing potential cost increases upfront, you'll not only protect your financial interests but also build a stronger, trust-based relationship with your clients.
Change orders can be a minefield, but they don't have to be. We'll guide you through the three main types of change orders—client-generated, contractor-generated, and government-generated—and their impacts on project costs and timelines. Clear communication and detailed documentation are your best defenses against misunderstandings and disputes. We also share strategies to avoid losses in job estimating, emphasizing proactive material ordering, accurate initial measurements, and maintaining transparent client communication. This episode is packed with practical advice to help you navigate the complexities of contracting, ensuring your business remains both profitable and professional.

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Chapters

1. Master Writing Estimates (2/2): Safeguarding Your Business Profitability and Navigating Change Orders (00:00:00)

2. Protecting Your Estimates With Work Orders (00:00:01)

3. Managing Budget Variances Through Communication (00:08:48)

4. Protecting Estimates Through Client Engagement (00:15:06)

5. Effective Change Orders and Line Items (00:25:44)

6. Avoiding Losses in Job Estimating (00:34:44)