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One of the leading causes of restoration companies suffering financial hardships and ultimately going bankrupt is the inability to realize the needed profit margins on their work. This is due in large part to poorly written estimates, estimators having too heavy of a workload, and a lack of understanding of how to capture the dollars needed.
In addition, estimators rarely have the opportunity to hone their craft, which can lead to disaster if the estimator has to write an estimate on a project they have never encountered before. When insurance adjusters run into this, they simply call on a building consultant to review their estimates or have the consultant write the sheet for them. Restorers on the other hand often wing it on their own in hopes that whatever their estimator throws out there will stick. More often than not, this doesn’t work out and the restorer ends up being forced to accept far less than what the job requires or what the work is worth.
The purpose of the peer review process is twofold. First, it helps ensure that the restorer has accurately scoped a particular loss and can make the maximum profit on their work. Secondly, a peer review helps the estimator improve their skills and see things they may have been overlooking, which can result in significant increases in the company’s profit margins. The old saying “iron sharpens iron” applies here.
Here are 10 questions to consider before submitting an estimate:
- Does the estimate include all the tasks necessary to do the work?
- Is the estimate priced accurately to cover tasks that may not exist in Xactimate’s database?
- Have you included all of the line-item entries that you may be entitled to charge for?
- Have you included notes on the line-item entries to better explain why they are included?
- Have you attached photos and or links to other supporting documentation?
- Have you considered all of the potential code upgrade related items?
- Have you covered all of the logistical and general items?
- Have you properly addressed all of the tasks necessary for a proper smoke odor remediation, fire cleanup, or other key components that address fire and smoke restoration?
- Have you included and appropriately marked up invoices from subcontractors, material suppliers, or vendors?
- Does your estimate include elements that comply with state federal or local regulations?
These and many other factors can make all the difference between an estimate being profitable in the end or becoming a loser. If you are tired of losing money and would like to stop the bleeding, we can help.
PEER REVIEW CAN HELP WITH ESTIMATING LARGE LOSSES SUCH AS:
- Structural collapse
- Fallen tree damage
- Residential fires
- Commercial fires
- Smoke damage
- Mold damage
- Concrete spalling
ABOUT YOUR COACH SEAN SCOTT
Sean Scott is a second-generation restoration contractor who has over 42 years of hands-on experience in the construction and restoration industry. He has been involved in over 10,000 residential and commercial property damage claims with most of the major insurance carriers. He is currently active in all types of fire, smoke, and flood restoration projects, appraisals, and construction consulting work.
Sean is also the author of Secrets of The Insurance Game, The Red Guide to Recovery – Resource Handbook for Disaster Survivors, Co-Author of The Native American Disaster Preparedness Handbook, and has published numerous papers and articles on restoration topics. Many of his articles have been published in Restoration & Remediation Magazine, Claims Magazine, U.S. News & World Report, and other publications.
Sean has also been featured in the following programs and periodicals: