Show Me the Money

One of the benefits of good estimating is making money and utilizing resources the most efficient way possible. There is an inherent relationship between making money, utilizing resources, and reducing waste. There is not much future in losing money. I guess the largest benefit to estimating well is having increasing profit margins.

Some of my clients worry about estimates that are too high. They worry about not getting the business. There is a big difference in understanding a project cost and bidding the appropriate amount vs. bidding a project just to get the business. My experience has been that when companies bid on projects just to get the business, they lose money. Again, there is no long-term future in losing money. I am not sure it is a good idea to lose money in the hope of getting future business. Under bidding and losing money on a project is setting a bad precedent with a client.