Contractor estimate: from takeoff to a price that holds

The estimate gets written at the kitchen table after a ten-hour day, and it is the most expensive document your business produces. Everything after it — the schedule, the change orders, the last check — argues with what you wrote in that hour.

Take off the quantities first, and keep the arithmetic

An estimate starts with a number, not a sentence. Squares of roofing, linear feet of baseboard, square feet of drywall minus openings, each for devices, cubic yards of excavation.

Write the math, not the result: (12*8)-(2*3*5) rather than a finished 66. Six months later, only the chain can answer whether the two windows were deducted.

Line items, not one number

"Kitchen remodel — $34,000" is a price you defend whole or not at all. Thirty-eight lines with quantity, unit and unit price get discussed one by one, and the customer usually objects to two of them.

Split labor from material on every line. That is what prices a change with one edited quantity, and the only way the job can be costed afterwards against what you assumed: job costing, bucket by bucket.

Markup is not margin

Cost $1,000, markup 20 percent, price $1,200 — margin $200 on $1,200, which is 16.7 percent. To keep 20 percent you price at $1,250, a 25 percent markup. Across a year that gap is a truck.

Carry a markup per cost type — material, labor, equipment, subcontractors — and price labor at the loaded rate: wage plus payroll taxes, workers' comp, liability and the paid hours nobody bills. On federal construction over $2,000 the rate is not yours to pick at all: prevailing wages and certified payroll.

Allowances and exclusions decide the argument

An allowance is not a price, it is a placeholder with your name on it. Write it with a quantity and a unit — "tile allowance, 220 SF at $6/SF material" — and say in the same line what happens above it: priced as a change order, not absorbed by you.

Then write what the price does not include. Rock in the excavation, abatement, rot behind a finish nobody could see. Whatever you leave out is assumed to be in.

Sales tax sits in a different place in every state

There is no national rate, and in construction the tax often falls on you rather than on the invoice. Texas residential repair and remodeling is the clearest case: under a lump-sum contract you pay tax on materials at the supply house and charge the customer none, so it is buried in your material cost; a separated contract reverses both halves.

Same job, two cost bases, and the choice is usually made by accident: one job, three states, three answers.

Change orders and deposits, settled before day one

California is blunt about both, and it is a fair model anywhere: a change-order form becomes part of the contract only if it is in writing and signed by the parties before the work it covers begins; a home improvement down payment may not exceed $1,000 or 10 percent of the contract amount, whichever is less; and the payment schedule has to be in dollars and cents, tied to work performed rather than to the calendar.

That schedule belongs in the estimate, not in the first invoice. How it is billed from there: invoicing for contractors, and what the job file looks like beside it, Zirko for general contractors.

Last line: put an expiration date on the price. Material quoted today and accepted in eight months is a different job at the same number.

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What Zirko does here: the measurement chain stays in the line item and is worked out again on the server when it saves; line items carry quantity, unit and a markup per cost type, with contribution margin per line and per document; and they travel into the order confirmation and the invoice without retyping. Zirko proposes no US sales tax rate — you enter the rates that apply to you.