Your Estimating Process Is Costing You Hours You're Not Billing

The Number Nobody's Counting

Spring 2020. I'm sitting at a card table in my garage because my dad is in the hospital with a knee replacement that turned into six weeks of complications, Hank is two years old and climbing my leg, and I'm writing estimates on a laptop that keeps losing the Wi-Fi.

I wrote maybe forty estimates that April. I don't know how many we closed. I never counted. I was too busy surviving to do math.

Here's what I know now that I didn't know then: a big chunk of that work was labor I paid for and never got back. Jobs we didn't win. Hours that evaporated. And I had no idea what that number was because I'd never once written it down.

Most shop owners I talk to track billable hours like a religion. They know what their guys ran last week, what percentage was billable, where the gaps are. Good. You should know that.

But how many of you have ever sat down and calculated how many hours your shop spent last month estimating jobs you didn't close?

That one's eating you. You just don't know it yet.

My dad Mike ran this shop for 36 years on personality and a Rolodex. Estimates lived in his head, in his voice, in whatever relationship he had with the customer on the other end of the phone. When his hip went and his phone stopped getting answered, there was nothing left. No process. No pricing logic written anywhere. No record of how he thought about a job. Just a number he'd give you, and you'd say okay.

And then that stopped working and there was nothing to catch it.

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What an Hour of Estimating Actually Costs You

From 2012 to 2018 I worked at Crestwood Plumbing. Thirty trucks, real management structure, actual meetings about actual numbers. It was the first place I ever saw someone run a labor cost report on estimating. Guy named Ron Petrak ran ops. He'd pull it every month — hours spent quoting, jobs closed, what the lost-quote labor actually cost the shop. Simple math, and it was never comfortable.

I'd never seen that in a small shop. Still rarely see it.

Here's a version for a shop like mine. Say you're costing your lead tech at $95 an hour internally. Your close rate on residential calls — and I'm talking what I've seen in my own numbers, not some survey — is somewhere in the low-to-mid forties, percentage-wise. You're competing with two or three other plumbers on most calls. Every time your guy drives out and the job doesn't close, you ate that labor. The job covered nothing. The customer called the other guy.

"Free estimates" are not free. Somebody is paying for them. In most small shops, that somebody is the owner, and he doesn't know it because he's never counted the hours as a cost.

Take the West 117th call I wrote about a few months ago. Dom drove out, snaked the tub, scoped the sewer, called me from the driveway. Two hours of his time. Thirty minutes of mine on the phone working through what we were looking at. That site visit, that diagnosis, that driveway call — that's estimating labor. If I'd walked that job at $4,200 like I would've three years ago, and lost it to the guy at $3,800, I'd have eaten Dom's two hours and my thirty minutes and had exactly nothing to show for it.

Two and a half hours. On one job. That didn't close.

Do that six times a month and go write the number down. I did this exercise in early 2021 and the total was bigger than I'd let myself think it was.

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It's Not That You're Slow. It's That the Process Lives in Your Head.

Here's the part where I'm supposed to tell you to get organized, work smarter, stop overthinking quotes. That's the standard advice. I'm not gonna give it to you because it misses the point.

Here's the real thing. When I started writing slow, it wasn't because I was distracted or lazy. Every job had to route through my brain because my brain was the only place the pricing logic existed. No one ever told me that was a problem. It felt like expertise.

I run two days a week in a truck when I should be in the office. I know this. Becca knows this. My dad knows this and he mentions it at Sunday dinner. And the reason my estimates used to take forever is the same reason I'm still in the truck — I haven't fully gotten the work out of my head and into a form that runs without me.

Dom is two years out of his apprenticeship. He's good. He's gonna be really good. But Dom can't quote a sewer line repair without calling me, because I have never written down how I think about sewer line repairs. When we scope versus when we just dig. How I think about a mature tree on a tight side yard. What the floor price is on a spot repair versus a full run. All of it is in my head. So Dom calls me. And if I don't pick up, the estimate waits.

That's not Dom's fault. That's not a training problem. I made myself the only place the answer exists, and then I acted surprised that everything slowed down when I was unavailable.

Nobody talks about this when you take over a shop. You spend years being the guy who knows more about the work than anyone else in the room, and it turns out that's not always an asset. Right up until it is the reason every hard quote is stuck waiting on you.

The fix isn't working faster. The fix is getting the process out of your head and onto something Dom can read in a driveway.

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What a Repeatable Estimating Process Actually Looks Like

I'm not talking about buying software and calling it a system. I'm talking about writing things down.

Becca works the office two days a week. I've written before about how her two days added more revenue than my fifth truck did — I mean that literally. But here's the part I don't say enough: the reason Becca can do what she does is that the information she needs is written down somewhere she can find it. When she takes a call and a customer describes a problem, she knows what questions to ask. She knows what the intake looks like. She knows when to give a range and when to get me. That didn't happen by accident. We built it over about two years, every time I realized she had to guess.

Same logic applies to estimating. If Dom is on a driveway call and I'm not picking up, there should be something — a page, a cheat sheet, whatever you want to call it — that tells him what questions to ask and what range to give. Not for every job. For the jobs that come in most often.

In Cleveland, that means knowing the pipe eras. Edgewater clay — the 1925 houses where you've got cast iron inside and clay tile outside, and the transition is almost always under the front porch. The 1965 ranch where the original copper is still fine but the drain stub-outs have never been touched and the first scope is going to show you a belly or a chunk of cast sitting in the invert. That's what I mean. Not "something." Something specific that Dom needs to know before he opens the cleanout.

That knowledge is in my head. Getting it onto one page per job type is the work.

What does that actually look like? A few things, none of them complicated.

Price floors, written down. Not a full flat-rate book if you're not ready for that. Just this job type, here's the minimum we walk out the door for. Here's what makes me want a camera before I give a number. Here's what kicks it up to a full scope-and-quote. One list per job type. If it takes more than one page, you're not done thinking yet.

How much Dom can quote without calling me, written down. When it's informal, Dom calls me on everything because he doesn't want to guess wrong. When it's a number in writing, he quotes with confidence. I get fewer driveway calls. The estimate moves. It sounds like a small thing. It isn't.

What turns a drain snake call into a camera call. What turns a camera call into a scope-and-quote. If Dom knows both of those before he gets to the house, the diagnostic path is already mapped. He's not improvising in the driveway.

None of this requires software. It requires sitting down and writing it out. The reason most shops don't have it isn't that the owners are disorganized. It's that writing it down means you have to stop running calls for two hours, and two hours is not something most of us feel like we have.

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The Estimate You Should Stop Writing Entirely

Not every job deserves a full proposal. That sounds obvious. It is not, in practice, how most of us operate.

I dropped American Home Shield and Choice Home Warranty in 2022. This is documented — I've got the year-over-year numbers. Revenue dropped that year. Net went up. I've written about this before and I'll keep writing about it because it still surprises people. Those jobs required full written estimates, line-item back-and-forth, and resubmissions when the warranty company decided something wasn't covered the way we'd written it. The time spent writing, rewriting, and resubmitting those estimates was a real cost. I never once counted it as a cost until I sat down and counted it. When I did, it was part of what made those accounts unprofitable.

The estimating time was buried in overhead. I was treating it like it was free.

There's a version of this on the straight residential side too. The four-hour proposal you write on a $1,200 job for a customer who's already called three other plumbers and is going with whoever's cheapest. You know who this customer is before you write the proposal. You write it anyway because it feels professional.

Go back to the West 117th sewer job. The guy who quoted $3,800 — I used to feel virtuous being in the middle at $6,800 with a detailed scope. I've talked to guys who run that low, y'know. They're not writing four-page proposals. They're giving a number fast, on the phone or on the driveway, and moving on. Sometimes they win because the customer just wanted a number. Not a document. A number.

Knowing when to write the full scope and when to give the number fast — that's a real business skill. It has nothing to do with cutting corners on the work. It's about reading what the customer actually needs from you, and not burning your estimating time on a process that doesn't match the situation.

Some calls need a detailed scope with photos and a payment schedule. Some calls need a price by Thursday. The job of figuring out which is which, and building your quoting process around that, is how you stop losing hours you're not billing.

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What You Do Monday Morning

Not a system overhaul. Three things sounds like a triad so let me just tell you what I'd actually do.

Pull one number first. Go back through last month's estimates. Count how many didn't close. Then — and this is the part people skip — actually calculate how long each one took. Don't estimate the time. Ask Dom. Ask Becca. Ask yourself and be honest. Write the number down. Total hours spent estimating jobs that didn't close, multiplied by your real cost per hour for whoever did that work. Just having that number changes how you think about the next proposal you're about to spend three hours on.

Pick one job type. The call that comes in most often. For most plumbing shops that's drains or water heaters. Sit down and write out how you decide what to charge for it. Floor price. What triggers an upsell. How much your lead tech can quote without calling you. One job type, one page. If Dom can read it in the driveway and give a number with confidence, it's done. If it's longer than one page, you're overthinking it and you won't finish it.

Set one dollar threshold. Pick an amount under which your lead tech or your CSR can quote without calling you. Write it down. Tell them. That's it. One number, in writing, communicated. You just stopped being the reason those quotes are slow — on every job under that number, which in my shop is most of them.

Do those and you'll know more about what estimating actually costs you than you did last week. That's the whole point.

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FAQ

How do I calculate what my estimating time is actually worth per hour?

Start with what you'd bill that hour if it were a service call. If your lead tech runs at $95 billed and you're the one doing the estimate instead, that hour costs you $95 in opportunity, minimum. For owner time, I use my target hourly rate — what I'd need to charge to justify being on a job versus doing something that moves the shop forward. I'm not gonna give you a number for your market because I'm in Parma, Ohio, and my numbers are my numbers. What I'll say is: whatever you think your time is worth, do the math with that number, and then go look at what you spent last month on estimates that didn't close. The discomfort is the point.

Should I charge for estimates, and will I lose jobs if I start?

Depends on the job type and the customer. For a drain call where diagnosis is part of the visit, I don't charge separately — the service call fee covers the first look. For a full sewer scope with a written repair proposal, I charge for the scope. In my market, most customers accept that. You lose some calls. The calls you lose are usually the ones shopping purely on price, which means you weren't going to make money on them anyway. Try it on one job type first. The drop-off is smaller than you think.

What's the right close rate on estimates — how do I know if mine is too low?

I'm not giving you a benchmark number because any range I give you is going to be based on my market, and my market is not your market. In my shop, for residential service work, I track it monthly and I know what's normal for us. What I'll say is: if you're closing below 30% consistently, you're either quoting jobs you shouldn't be quoting or your number is out of range for the call type. If you're closing above 70%, I'd bet you're priced too low — not might be, I'd bet it. Track your own numbers for 60 days. Your close rate in your market is the only one that matters.

How do I know which jobs are worth a full written proposal versus a ballpark on the spot?

Two questions I actually ask myself. Is this customer deciding based on scope and detail, or are they just looking for the lowest number? And is this job complex enough that a misunderstanding about what's included is gonna cost me real money on the back end? If both answers point toward yes, I write the full proposal. If the customer is clearly shopping price and the scope is clean, I give a number fast and move on.

The tell I watch for — and it's pretty reliable — is whether they ask what it costs before I finish describing what's included. That's not a customer who's going to read your four-page proposal carefully. Give them a number. Save the proposal for the job that needs it.