Monthly vs Project-Based Estimating Which Model Works Better for Contractors

Monthly vs Project-Based Estimating: Which Model Works Better for Contractors?

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In today’s era of digitalization and tech advancement, every sector is evolving at a rapid pace. So is the case with the construction industry, and the decisive factor that can make or break your profit is accurate estimating. For efficient bidding, contractors and subcontractors need to have precise takeoffs. To obtain reliable estimates or Construction Takeoff Services, contractors tend to outsource this tedious task of estimation. Now the question arises that what should be your choice while outsourcing a monthly estimating plan or a project-based one?

Both of these models have some pros as well as cons associated with them. But before opting for any of these models, you should have a clear picture of the workload, the scope of the project, and long-term goals. To have a better understanding of these models, we will explore different aspects of these two that will help to choose the right one for your construction business.

Understanding the Two Models

Before digging into the comparison, let’s have a basic understanding of these two approaches

1. Monthly Estimating Packages

A monthly estimating package is a sort of subscription where you pay a fixed amount each month to get takeoffs rather than paying for an estimate to estimate. The number of estimates depends upon the category of chosen package, which may be 15,20, and so on. It saves you from hiring an in-house employee and the overhead cost.

Main Features:

  • You get the desired number of estimates depending on the package
  • Priority turnaround times
  • Access to a dedicated estimator
  • Discounted pricing

This model is suitable for those having continuous stream of bids and want to have dedicated support throughout the entire month.

2. Project-Based Estimating

In project-based estimating, you hire a professional from a firm for a single job. It is a traditional one-time take-off and cost estimates provided by a firm when you send them project drawings. You have to pay for that job one time with no monthly commitments. This model is suitable for small businesses that have seasonal work.

Comparing Monthly vs Project-Based Estimating

Let’s have a detailed comparison of these approaches by pointing out the key differences, their strengths, and weaknesses.

1. Cost Structure

  • Monthly Plans:
     In monthly plans, you have to pay fixed charges depending on the package selected. It usually costs somewhere between $1500 – $2500. The biggest advantage of a monthly package is lower per-project cost. It is good for regular bidders.
  • Project-Based:

In this model, a fee is charged per estimate. The charged fees depend upon different factors, including the size of the project, specific trades, and complexity. The typical charges are normally between $100 – $700 per estimate. It is good for those who are used to bidding once or twice a month.

2. Flexibility

  • Monthly: To make the most out of your monthly package, you must use it consistently by sending plans at regular intervals. There is a slight chance of underutilization of this plan in off-peak seasons like winter, when you don’t have enough projects to send.
  • Project-Based: This plan has greater flexibility as you only pay while having a project in hand. It is actually a lifesaver for small contractors and remodelers.

3. Turnaround Time

  • Monthly Plans:
     In monthly plans, the firm is bound to provide takeoffs within the mentioned time frame, which is usually 24-48 hours.
  • Project-Based:
     You might face delays as the provider might be busy and also, and they tend to prioritize monthly clients. However, this is not actually for all firms, as Wilson Takeoffs prioritizes every client, whether it’s monthly or project-based.

4. Relationship and Consistency

  • Monthly:
     In monthly plans, you usually have a dedicated estimator working on projects, which creates consistency and accuracy in bids as they get familiar with your bidding style and profit margins.
  • Project-Based:
     You might experience a slight variation in style or formatting as you don’t have access to a dedicated estimator in a project-based approach.

5. Scalability

  • Monthly:
     There is an ease of scalability, as when your business grows you can easily upgrade your plan by paying a few more bucks. It just acts like an extension of your team.
  • Project-Based:
     Scalability here is limited as every estimate needs a separate order and payment as well. It can be very expensive in peak months like summer.

6. Risk and Commitment

  • Monthly:
     This involves strict commitment in terms of timely monthly payments. You have to pay each month, irrespective of the usage of the service.
  • Project-Based:
     It doesn’t involve commitment, as you pay for each estimate separately. It is the best option if you want to try a new firm. 

Pro Tip- Hybrid Approach

The best practice is to use a hybrid approach. It means that if you have consistent bids but not very large in numbers, you can subscribe to a small monthly package. And during peak season, you can make use of a project-based approach along with a basic monthly package. This is the smartest approach to achieve stability with flexibility.

 Final Verdict

There is no one-size-fits-all answer, but it all depends on how you operate and your preferences.

If You… Best Option
Bid regularly on multiple projects per month Monthly Estimating Plan
Work seasonally or handle a few bids Project-Based Estimating
Want flexibility + consistency Hybrid Approach

Outsourcing is actually a smart decision, whether you do it on a monthly basis or a project basis. It helps you save time, expenses, and ultimately win more bids. The choice of model depends on your unique estimation needs that align with your business rhythm.