How to Estimate Cost of a Bathroom Remodel Accurately as a Contractor
Remodeling
5 min read
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Learning how to create accurate estimates is a skill every contractor needs. In fact, it’s absolutely essential for running a profitable bathroom remodeling business. Below, we share several tips to help you perfect your estimating expertise for pricing a bathroom remodel.
Prepare a Standard Price List
Having a pre-made price list on hand will streamline your estimating process. Just be sure to update it regularly by adjusting material and labor prices to reflect current costs.
Capture the Customer's Input
Calculate Labor Costs
Calculate and Insert Your Gross Profit Margin
Gross profit margin (GPM) is the amount you add to an estimate to cover your overhead and profit. It is calculated as a percentage of project costs. According to Remodeling magazine, GPMs need to be 35% to 38% on average. However, some years are tougher than others, causing contractor margins to fluctuate. The National Association of Home Builders’ 2020 Remodelers’ Cost of Doing Business Study reported an average GPM of 30.1% in 2018. You’ll want to work with your accountant to determine the best percentage for your business.
Consider Using Pre-constructed Shower Kits vs. Site-built Mud Beds
Premade shower kits can be beneficial because it means you do not have to do a custom mud job. Completing a properly constructed mud bed requires more skill and time — and, therefore, may be more difficult to estimate due to the custom work being performed.
A CLOSER LOOK AT TWO SHOWER-INSTALLATION OPTIONS*
MUD BEDS | PRE-CONSTRUCTED SHOWER KITS |
Pros
| Pros
|
Cons
| Cons
|
* Source: Floor Covering Installer magazine
Provide Transparent Information to Manage Expectations
For example, if your estimate will be based on laying a vinyl floor and not a tile floor, share this information with the homeowner upfront. You want to make sure you’re both in agreement on details like this before you complete your estimate.
Plan to Supply Your Own Materials vs. Use a Homeowner’s Materials
This way, you can create a more accurate labor estimate because you will already be familiar with the materials you intend to use. When a homeowner wants you to use a pre-purchased item, a level of uncertainty creeps into your estimate.
For example: If the homeowner bought a faucet brand or style you have not installed before, you may later discover its installation requires more time than you anticipated. Or, if the homeowner bought a vanity to replace a pedestal sink, you may later discover you have to reconfigure plumbing pipes to make it fit. A better approach is to provide a list of approved selections for items customers want to pick out themselves. Then create your estimate around their selections.
Be Clear About Tasks That Are Not Your Responsibility
To avoid misunderstandings, consider adding verbiage that explains tasks you will NOT do – e.g., furnishing and installing wallpaper in a homeowner’s bathroom.
Use a Mobile App for Easier, Faster, More Accurate Estimate Creation
A good app will give you the power to produce accurate estimates effectively and efficiently. For example, magicplan is an easy-to-use bathroom remodel price estimate tool that allows you to create a bathroom sketch right on your smartphone or tablet. Plus, you can polish the sketch to illustrate your vision for the project – like indicating if you plan to install a tile floor. Then magicplan automatically estimates materials needed, compiles material and labor costs from your integrated price list, and produces a professional-looking estimate.
This process is much quicker and simpler than writing an estimate by hand, and prevents errors caused by manual calculations. You’ll get a clear overview, make fewer mistakes and never enter the same information twice. Plus, you can create accurate estimates in a matter of minutes, not hours!
Conclusion
Accurate estimates are absolutely essential for maintaining a profitable remodeling business. By following the tips listed above, you’re sure to enhance your estimating skills for future bathroom-remodel projects.
