Why Cost-Based Estimating is the Only Way Forward for Contractors

Contractors still using flat rate estimating are either leaving money on the table or being left in the dust by their competition. The reality is, flat rate pricing is outdated and risky—it leads to unpredictable profits, and in many cases, outright losses. In today's highly competitive market, relying on a one-size-fits-all approach is a sure way to watch your margins shrink while your competitors thrive.

Flat rate pricing might seem like an easy way to bid jobs quickly, but it’s a shortcut that comes at a cost. When you use flat rates, you’re essentially guessing at what a project will cost without considering the specific needs and complexities of each job. This can lead to serious issues: underestimating labor hours, missing key material costs, and ultimately, eroding your profit margins. Even worse, if you overestimate, you risk losing the job to a competitor who’s bidding more accurately.

On the other hand, cost-based estimating puts you in control. By carefully calculating all the expenses involved in a project—materials, labor, overhead, and even those small, easy-to-miss details—you can set a price that ensures a healthy profit margin. Cost-based estimating isn't just about covering your costs; it’s about building a sustainable, profitable business. When you know your numbers, you can bid confidently, knowing that your price reflects the true value of your work.

Sure, cost-based estimating can seem daunting. It requires more time, attention to detail, and sometimes a bit of math that’s not exactly second nature for everyone. But the good news is, there are tools that make it easier. Systems like OneCrew are designed to simplify the process, taking the guesswork out of estimating and helping you develop accurate, profitable bids every time.

Don’t let flat rate pricing drag your business down. Embrace cost-based estimating, and watch your profits—and your reputation—soar.