Home repair contractors have to deal with tight margins. Profits can vary by specialty and location. However, overhead costs, subcontractor payments, and taxes can limit net income. In 2023 and 2024, the average net profit margin for a home improvement company was just 9.32%.
Mistakes during estimates can limit these profits. Worse, getting the calculations wrong can lead to a loss on the project.
You need to use an accurate home repair estimate template to avoid these scenarios. In this article, we will explore the role these documents have in your home repair business. You’ll learn about the different types of estimate templates and the best practices for filling them out.
We’ll also offer a step-by-step look at how to make winning estimates. The article will end with actions you can take today to start improving your home repair bids.
Download Your Free Home Repair Estimate Template
The Importance of Creating Accurate Home Repair Estimates
There are two goals of precise home repair estimates. First, the price needs to be competitive with other bidders. Second, you have to ensure you earn enough profit to keep your business going.
Home repair estimate templates can help ensure your company achieves these financial fundamentals. They offer several less obvious benefits too. Here is a look at the different advantages fine-tuned estimate worksheets can bring your business:
- Prevent misunderstandings. Accurate estimates give customers transparent pricing. They’ll see each aspect of the project and how much it costs. The information in the document shows the overall cost and the price for each component of the project.
- Enable better budgeting. The exhaustive list of expenses lets both you and your clients create detailed budgets for the project. You’re less likely to be surprised by unexpected costs.
- Plan project timelines. Templates also assist with non-budget aspects of project planning. You can make detailed time estimates based on labor and materials needs. And you can schedule subcontractors or parts deliveries with more accuracy.
- Provide flexibility for estimates. With a good template, you and any qualified employees can come up with similar estimates. Your company will have consistent pricing regardless of who fills out the bid.
Templates can help create accurate estimates consistently. However, you have to take great care when making these pricing frameworks. A mistake in the original template will hurt the accuracy of every bid you make, bringing lower profits on each project.
FROM ONE OF OUR PARTNERS: The Good, Better, Best Approach – Does It Work?
Different Types of Home Repair Estimate Templates
Templates come in different formats. The best type for your company will depend on the kind of work you do, your preferences, and existing estimation or budgeting tools.
There are five main choices for estimate templates:
- Word files: Microsoft Word files are straightforward to customize and print. You can easily add or delete lines to meet the needs of each project. On the other hand, Word lacks some of the automation tools you get with different options.
- PDF documents: PDF files are easy to fill with PDF software. You can also print them and complete them by hand. This option is slightly more difficult to change on the fly. But it can help ensure consistency and avoid changes made by mistake.
- Excel spreadsheets: Spreadsheets can automatically make calculations. They ensure accuracy and lower the amount of work needed to create the bid. Spreadsheets don’t look as nice as Word or PDF when printed, so you may need a different document to show clients.
- Online templates: You can use online tools to create, print, and share estimates. This option typically features user-friendly interfaces for quick document creation. However, the estimates may not include fields or details necessary for your bids.
- Estimate software: Specialized software can also automate calculations. Cloud-based tools can let multiple people contribute to the estimate and streamline sharing with subcontractors and clients. These features typically come with a higher price tag than other choices.
Some of these options may be more costly than others. You need to consider the overall value rather than just comparing the price tags of Word, PDF, and software products.
How to Personalize Your Estimate Templates
The items in your estimate template may vary. The variable will depend on your area of specialization and processes. You’ll need to personalize your template so it includes the correct data points. It could also be necessary to make adjustments for each project.
Here are steps to customize your template and ensure it has the necessary information:
- Use specialized software for estimates. Estimate software can use AI to make adjustments based on data inputs. It will make the necessary calculations depending on the info you provide.
- Access free templates online. You can use a library of free templates online. Utilize the multiple choices available on the internet to find the best template for each specific project.
- Break down your processes. Provide details about each step of the process. This approach adds transparency and helps customers see where the project costs come from.
- Create customizable lines. Good templates should be flexible. Leave space to add costs or items that might be unique to the project. You can use this extra space or customize individual estimates without overcrowding parts of the document.
- Leave space for add-ons. Create templates that allow you to offer additional items. For instance, you can suggest extended warranties or provide premium materials. Special fields for this upselling allow you to make the premium options clear to customers.
- Add room for clients to leave notes. Let clients have input. Reserve space for them to add requirements or offer counter bids. This step lets you show that you take customer input seriously.
- List discount options. Add an area on the template to list discounts. This lets you customize each estimate based on current promotions or other factors.
Don’t forget to personalize the template visually. Add your company logo and contact details. This lets customers easily recognize you. Why is this important? Many homeowners will collect multiple bids. Branding ensures they can always identify which one is yours. The phone and email make it easy for them to contact you if they choose your estimate.
FROM ONE OF OUR PARTNERS: Home Remodeling Marketing: A Guide to Taking Your Marketing Plan to the Next Level
Best Practices for Home Repair Estimates
The estimate process is essential for getting new business and keeping existing customers happy. It’s also necessary to ensure you earn enough profit from each job.
You can increase the odds of positive results by having a well-defined approach to estimates. Here are best practices for home repair estimates:
- Specify achievable budgets. You might be tempted to lower bids as much as possible to compete on price. However, you should set realistic budgets for the project. Ensuring profits and avoiding losses is the only way to operate a sustainable business for the long term.
- Communicate with customers. Talk with customers to make sure your estimate addresses their actual needs. Show them the document and let them offer feedback. Once you get their insights, you can create a more personalized final estimate.
- Evaluate past estimates. Look at past bids. Assess them to see where you could have cut costs or made other improvements. Refine current estimates based on these insights.
- Keep records updated. Assess the estimate as you complete the project. Update records so that you have an accurate picture of the project budget and timeframe.
- Offer realistic warranties. You should be confident enough in your abilities to offer warranties. At the same time, you do not want to provide warranty periods that are longer than necessary. Your guarantees should be the industry average in terms of length.
- Have follow-up protocols. Follow up with customers after providing the appraisal. Create additional templates for contacting customers after the estimate. Also, give them channels to offer counter bids or feedback to you.
Continuously evaluate your best practices for estimates. If something is causing inaccuracies or losing business, take it out. Don’t be afraid to make changes. However, if you alter your estimate process, test the changes on a couple of projects before fully adopting them.
FROM ONE OF OUR PARTNERS: 4 Tips for Home Services Providers Working with Lead Generation Companies
How to Create a Killer Home Repair Estimate (with Free Template!)
Home repair estimate templates help you consistently craft winning estimates. They ensure you don’t miss necessary details.
With a template in hand, you can begin the estimation process. For home repairs, the process is most effective if you do it in two stages. The first four steps set the stage for accurate and detailed estimates. The second four help you execute your calculations accurately.
Let’s take a look at the first four steps needed to craft the perfect bid.
Initial Steps for Crafting a Winning Estimate
The first part of the process involves finding tools and gathering data. Here are the four steps needed to start the effort:
Understanding the Scope of the Home Repair Project
Decide what the project will include and what it won’t. For instance, a project might involve installing a new air conditioner. You will craft a bid for this specific work. The project won’t involve any more work.
Well-defined scope saves you from having to take on different tasks, such as updating the ductwork or adding a natural gas line. It helps customers understand what you will and won’t do for the project. And it ensures you avoid any misunderstandings later in the process.
Gathering Necessary Information for the Estimate
Different factors can affect the complexity and cost of a project. Make sure to account for all details. Collect information even if you do not think you will need it.
For example, you can take pictures and measurements of the job site. And you can take notes on everything the client says about the job. This information could come into play later in the bidding process. If you have the data on hand, you won’t have to visit the site again to fine-tune the estimate. You can simply look at your notes.
Factoring in All Variables Influencing Home Repair Costs
Consider all the factors affecting the price of the project. These could include the types of materials and parts. You also have to consider whether the parts you plan to use will work with existing infrastructure.
Also, assess the location of the job site. Look at both how far you have to travel and how easy it will be to get materials and work in the available space. Look at necessary permits and inspection requirements for the city where the project takes place. These rules can add to the price tag.
Take note of other factors that could make the project more difficult or cause delays.
Utilizing Technology for Enhanced Estimates
Technology can enhance estimates in several ways. First, software can use AI to calculate optimal pricing based on a variety of factors and data points.
Second, you can use software to create very accurate measurements. These tools can read blueprints and produce dimensions or help figure out the materials needed for the job.
RELATED ARTICLE: The Cashless Business: Why Home Remodelers Should Ditch Cash & Check Payments
Creating a Detailed and Accurate Estimate
The first four steps set the stage for accurate estimates. The next four help you fill out the document and create a winning bid. The following steps give you a complete and accurate appraisal:
Developing a Detailed Cost Breakdown
List all the different costs you might encounter when undertaking this project. Try to be as exhaustive as possible. For the first draft, include every possible cost.
Also, you want to break the expenses down and be really detailed. For instance, list the costs of all different types of labor and materials. This does two things. First, it helps you fine-tune the budget and make changes. Second, it provides transparency so that customers can see exactly where the costs come from.
Incorporating Material Costs and Labor Charges
Add the cost of materials to the estimate. Again, you want to be as detailed as possible. You can create multiple estimates by offering different quality levels or brand options.
Include labor costs as well. It pays to break down the expenses here too. Clients will usually appreciate the transparency if you explain the cost of different types of work during the project.
Adjusting for Unforeseen Expenses
Leave space for unexpected costs. These might include changes to material prices or unexpected repairs. For instance, you might discover structural damage during a renovation. This will need to be repaired, adding to the cost of the project.
You can either factor these costs into the initial bid or make it clear that such changes fall outside the scope of the agreement. You can then outline steps to change the estimate to incorporate these new requirements.
Calculating Profit Margin and Finalizing the Estimate
You want to ensure your business remains profitable. The way to do this is to calculate profit margins and ensure an expected profit after all your expenses get paid.
The profit is the cost of the project minus expenses. Once you come up with a realistic figure, you add it to the estimate.
Finally, add all the figures together and finalize the bid.
Your Free Home Repair Estimate Template
Below is what a template could look like for a home repair project. The document always starts by identifying the parties involved.
This is an agreement between the “Contractor”
[Your company name]
[Your address]
[Your phone number and email]
[License and insurance numbers]
And
The “Client”
[Client’s name]
[Client’s address]
[Client’s phone number and email]
The “Estimate” involves the project at [address of job site].
The project involves [description of work and project goals].
Breakdown of Costs
| Labor | [Detailed description of labor] | [Hours] | [Rate per hour] | [Total labor cost] |
| Materials | [List all materials] | [Units] | [Price per unit] | [Total materials cost] |
| Equipment Costs | [List equipment used] | [Days] | [Cost per day] | [Total equipment cost] |
| Permits and Fees | [List all permits or licenses] | [Permits] | [Cost per permit] | [Total permit cost] |
| Cleanup | [Waste disposal or cleanup fees] | [Hours] | [Price per house] | [Cleanup cost] |
| Miscellaneous Costs | [Other items] | [Number or amount] | [Cost per unit] | [Total cost] |
Subtotal: [Subtotal]
Contingency costs: [Amount – usually 10% to 15% of subtotal]
Tax: [Tax rate in decimal form x subtotal and contingency costs]
Overall total: [Subtotal + contingency + tax]
Signatures
Contractor: [Your signature]
Client: [Customer’s signature]
Top Tips for Simplifying Home Repair Projects with Templates
Effective home repair assessment templates can streamline your bidding process and help you get more clients. It can take time to perfect templates. It might take a few projects and input from customers before you develop a fool-proof estimate system. It’s best to simplify the process as much as possible.
Here are four tips for getting started on making more accurate, profitable estimate templates:
- Find free trials or demos. Estimate software companies may offer free periods when you can try their product. Use these opportunities to test the software and see if it provides enough value to warrant a purchase.
- Use free tools. You can also try free versions of word processing or spreadsheet software. See if you can customize settings enough to use these free options in your business. This could limit the amount you spend on software.
- Make an estimate inspection checklist. Collect all the essential data. Even if you don’t use certain information, you should save it. A checklist helps you get every piece of necessary data. If you need other calculations later, you can use it.
- Talk to materials providers. Discuss potential discounts with materials providers. Deals can help you lower costs and pass savings on to customers. Or it could help you earn more profits without having to increase pricing.
