Handling the Estimating and Proposal Process

When a client comes to you seeking your help with a remodeling project, you need to have a set strategy as to how you will handle the estimating/proposal process. The goal of this process for your kitchen and bath firm is to move from the initial general cost discussions with the client to signing a contact that is both profitable for your company and meets your client’s remodeling needs.

This process can be broken down into three steps: feasibility, planning and refinement and final contract pricing.


After the initial meeting with the prospect, the next step is the feasibility/affordability phase. At this point, the designer will work with the client to determine what sort of a project the client has in mind, normally visiting the home to determine what the customer’s design tastes are, what sort of structural limitations there may be to contend with and how the client may want the kitchen, bath or addition to function when completed.

At the time of the initial contact with potential clients, you should get a rough idea of their budget for the project. The designer should be able to evaluate the proposed project in relation to that budget and warn the clients if there appears to be a
wide discrepancy between the hoped-for budget and what the actual cost might be.

During the course of the first site visit, information should be gathered that will allow a preliminary, or ballpark, estimate. This information should include measuring the rooms involved in the remodel, noting what the existing finishes (flooring, siding, windows, etc.) are, looking at the plumbing and electrical set up and taking a number of pictures, both inside and out.

Once this information has been gathered on the proposed project, you should be in a position to put together the ballpark estimate for the customer. It’s important that a means is developed that will allow you to come up with a reasonably accurate rough estimate for projects in a minimal timeframe (approximately 30 to 90 minutes). In order to do this, you need to develop a matrix of cost figures drawn from your job costing system, experience and piece rates.

By using a spread sheet program, such as Excel, you can create a template (or templates) that roughly follows your normal estimating process. It is then fairly easy to use this spread sheet to come up with your rough estimate of the project. Using this process, it is possible to reliably come within 10% of the ultimate price of the actual project.

One of the problems with this early rough estimate is that you will need to strike a balance between the typical specifications a customer might choose and the choices that are often made as clients are exposed to premium products during the design and specification phase of the design development.

Design Development

Assuming that the client is satisfied with the proposed design and rough estimate cost projections, the next step is to sign a design agreement with the client. As this phase progresses, the design is formalized and actual products are specified.
Again, some form of estimate software is most helpful, whether this is one of several available on the market or simply a spread sheet of your own creation. The point is to capture your cost information and allow the software to do the math. Such software also allows estimates to be modified without starting over each time.

The objective at this stage of the game is to be able to attach firm pricing to as much of the job estimate as possible. The first step is to firm up the design drawings, attaching specifications for the actual products that will go into it. By this process, a significant portion of the costs to be incurred can be identified. If this is a large job that you will get bids from your subcontractors on, those costs can be tied down. If the project is experiencing “scope creep,” it’s important at this point to make sure your client is kept appraised of this and adjustments are made to meet the client’s expectations.

As you work your way to the final fixed-price estimate, the goal is to remove as much uncertainty from it as possible. This will lead to less stress, less trouble getting paid and greater overall client satisfaction levels.

Final Contract Pricing

When the client is satisfied with the design and all selections have been made, it’s time to put together the final contract documents. At this point, there should be relatively few details that are not decided. Try to leave as few allowances as possible, specifying as many of the items as you can.

Every project will have some surprises along the way. The larger and more complex the project, the more opportunities there are for the unexpected to occur. For this reason, make sure that your pricing process provides for contingencies. The tighter your plans and specifications, the easier it will be to identify things that are actually outside the scope of the contracted work, allowing for change orders to cover the cost.

When all of the decisions have been made, make sure they are accurately documented in the contract documents. A good idea is to include catalogue cuts of specific products, since product codes do not really define the actual items to the layperson, leaving you open to the “you can’t expect me to know what that means” argument when the client doesn’t get what he or she expected.

When all of the plans and specifications are complete, you should go over them with your client, item by item, and have the client initial each page. It is also important to have a clause somewhere in your contract that states that the signed contract and related plans and specifications are the complete contract and supersede any and all prior discussions between your staff and the client.

The estimating process should move seamlessly from the early discussions of general cost of remodeling projects, to rough estimates of the client’s desired project to detailed cost estimates of the actual job. If you approach this as a joint effort between you and your client, it should result in a successful outcome for both involved parties.

Now that you have planned the work, it’s time to work the plan to achieve a completely successful relationship with your client.

Read past columns on Business Management by Bruce Kelleran, and send us your comments about this story and others by logging onto the Kitchen & Bath Design News’ Web site, located at www.kitchenbathdesign.com.