It is easy to be overwhelmed by the scale of a large loss. One of the most crucial skills for any repair and remediation expert is the ability to see past the devastation and quickly and accurately compile an estimate for any size project. Sell yourself short and your estimate will not cover the costs of your company’s skills, time and materials. Aim too high and you will be undercut by competitors. It is a fine balance.
The first step when you are responding to a large loss is damage assessment. This is the foundation of the project. Make a mistake here, and you could pay dearly as the project unfolds. Get it right, and you will be off to a flying start.
Once you have accurately assessed the damage, you can start to plan your response and determine the scope of work involved. You need to figure out what remediation is going to cost, how many operatives are needed on the job, and whether you will need to source additional specialist equipment.
Three is the magic number
In generating your estimate, everything can be simplified to just three variables: the area/square footage of the loss, how much time you have to complete the project and the estimated production rate.
The first factor is the area to be cleaned. This should be a straightforward calculation — but has to be conducted accurately and verified with the client. The next consideration is the number of calendar days you have to complete the job. This may be determined by the client or by an external event, but is often non-negotiable.
The third and final variable, your production rate, is arguably the most crucial and requires a great deal of thought; however, it is also the variable most firmly within your control. If you have a realistic understanding of the capabilities of your people and equipment as well as a clear view of the type of structure and damage you are dealing with, you can estimate precisely what it will take to complete a recovery project under significant time pressure.
Every project is different. Generally, floods, fires and environmental damage loss events will be the highest cost projects, but even within these categories, the production time can vary profoundly. The type of damage you are dealing with will affect your production rate. If it was a fire, how extensive is the damage? What materials will you find in the loss environment? What burned?
Petroleum-based materials produce tacky soot surfaces that will take longer to clean than a non-petroleum-based fire. If there was a flood, what type of flood was it? Is there significant water damage? Was the water contaminated from a rising river or is it considered a clean-water loss? These are just some of the important questions to ask when considering the production-rate calculation.
Creating an accurate estimate
Once you know your production rate, you can create your estimate.
If you are faced with a large cleaning job, you first need to know the area or the amount of square footage that one person can clean in an eight-hour shift. This calculation is the production rate. For example, if we calculate that one skilled cleaner can cover 150 square feet in a day. That equates to an estimated production rate of around 150 square feet (leaving some margin for error). If we plug this calculation into a quick estimating scenario in which you have 35,000 square feet to clean in 14 calendar days, you can easily calculate that you will need 17 cleaners to complete the project: 35,000 ÷ 14 ÷ 150 = 17.
If we want to go deeper into the estimating process now that we know the production rate for this scenario, we simply apply our hourly rate to calculate the total labor need for the project. Once we know the cost of the labor, we apply best practices to quickly calculate the remaining factors of the project. Best practices tell us to consider a percentage of the total labor to calculate the remaining factors: supplies and materials cost (between 11-25% of labor costs), equipment rentals (10-21% of labor costs), vendors (5-10% of labor costs) and subsistence (10-31% of labor costs). Put these figures together and you can quickly estimate the overall cost of the project.
Similar calculations are used when the project involves drying out an area; the production rate relates to the capacity of the equipment. Larger pieces of equipment will be rated by CFM (cubic feet per minute). With smaller pieces, the capacity is typically stated via the number of gallons of moisture it can remove in 24 hours. You then have to work out how many pieces of equipment you need to complete the job in the given time frame, while taking into account any factors that might reduce the efficacy of your equipment. Do you already have the right type of equipment at sufficient quantity? If not, what will it cost to acquire the additional needed resources?
In every case, no matter the scale of the loss event, the process is essentially the same.
Calculate the square footage of the project environment, determine the time scale for project completion, and evaluate the production rate of your staff and machinery. By focusing your attention on these three variables, you can compile an estimate for any large loss quickly and accurately.
Thomas McGuire is the founder and lead facilitator of Large Loss Mastery, a series of training courses for loss adjusters and restoration and remediation professionals. Contact him at Tom@LargeLossMastery.com.