Concept to Think About

Permit me to take a crack in changing some thinking.

"Cost and Estimating" remains a very popular topic as PDCA education programs and publications.

However, may I suggest the terminology is inaccurate and perhaps even misleading. Here's a question to start…Most contractors provide "free estimates". If that is true and no intervening unusual circumstances arise, is the "estimate" what the consumer thinks is the final price? If the answer is "yes," then the free estimate is not an "estimate", it is an offer of final cost, right? If the answer is "no," then does the estimate have clear language that it is only an "estimate" and what is the consumer reaction when a contractor changes the estimate?

Perhaps it is time to be more precise and perhaps the precision will lead to clarity, which often turns into credibility and trust. Determining business costs is an internal business function. This is proprietary information, which varies significantly from company to company. This critical business function should always be labeled "Means and Methods of Determining Net Business Costs." This plus profitability is the "real" estimate.

Estimating the cost of a job should also be an internal business function. I suggest most consumers believe an estimate is a final cost and offer of work, unless catastrophic circumstances dictate otherwise. Therefore, there is good reason that an "estimate" should not have been seen by a consumer.

If a contractor feels an intermediate document must be put in the hands of a consumer, (to close on the spot), it should be called an "Offer to Perform Work" with the final cost subject to final inspection.

The really important document is the contract for services. PDCA has created as a member service a "model" contract, which we believe covers just about all circumstances. However, we urge that it be reviewed for compliance with state and local laws and compatibility with your personal company practices.

In summary, I am suggesting "cost and estimating" needs to disappear from the painting business lexicon. Instead, this phase of business practices should be thought of as a continuum of necessary steps.

INTERNAL

• "Means and Methods of Determining Net Business Costs"
• "Means and Methods of Estimating the Cost of Delivering Painting and Decorating Services"

EXTERNAL (to the consumer)

• Offer to Perform Painting and Decorating Work (if needed)
• Contract for Services
  
  The suggested change in terminology and process creates a much clearer understanding between consumers and contractors. In other words, it creates a meeting of expectations and outcomes, which in turn leads to trust, confidence, and satisfaction. When a project goes wrong, it is almost always because expectations and outcomes do not meet.
  
  What do you think?
  
  Ian
  
  Dr. Ian R. Horen, CAE
  PDCA CEO