• A. Open BookNeil Parsons, owner of Design Build Profit, breaks out project management, overhead, and profit, which together generally total 25% to 33% of the overall project. “I show this to a client and I explain that my biggest competitor is a homeowner who is acting as their own GC,” Parsons says. Although Parsons’ is usually not the lowest price, he feels confident that homeowners who don’t buy from him are those who choose to settle for lower standards of quality and service or who simply can’t afford him.B. Watch Your SpendingCosts are constantly evolving, so it’s important to track estimated costs versus what’s actually being spent. If no one is watching costs, it’s easy to run over-budget. It’s advisable to keep prices accurate and current so you’re not charging either too much or too little.C. Project PhasingEach of these eight numbers represents a type of remodeling job — kitchen, bath, addition, etc. “This way,” Parsons says, “you can make a game plan and potentially do remodeling in phases.” It also helps to break down a big number — total cost — into a series of (more modest) numbers.D. Selection ChoicesAppliances and any items a homeowner would have to select from a showroom — plumbing fixtures, countertops, cabinets — are not part of Parsons’ contract, but the estimate generated anticipates what the client will spend on those items to help them see the overall budget.E. Numbers GameCosts for selections are propagated from a pricing database that is generated from actual jobs produced by Parsons’ company. “Instead of using a national database, these are real work numbers that are tried and tested,” Parsons says. New remodelers can rely on a database, which Design Build Profit can provide.

    A. Open Book

    Neil Parsons, owner of Design Build Profit, breaks out project management, overhead, and profit, which together generally total 25% to 33% of the overall project. “I show this to a client and I explain that my biggest competitor is a homeowner who is acting as their own GC,” Parsons says. Although Parsons’ is usually not the lowest price, he feels confident that homeowners who don’t buy from him are those who choose to settle for lower standards of quality and service or who simply can’t afford him.

    B. Watch Your Spending

    Costs are constantly evolving, so it’s important to track estimated costs versus what’s actually being spent. If no one is watching costs, it’s easy to run over-budget. It’s advisable to keep prices accurate and current so you’re not charging either too much or too little.

    C. Project Phasing

    Each of these eight numbers represents a type of remodeling job — kitchen, bath, addition, etc. “This way,” Parsons says, “you can make a game plan and potentially do remodeling in phases.” It also helps to break down a big number — total cost — into a series of (more modest) numbers.

    D. Selection Choices

    Appliances and any items a homeowner would have to select from a showroom — plumbing fixtures, countertops, cabinets — are not part of Parsons’ contract, but the estimate generated anticipates what the client will spend on those items to help them see the overall budget.

    E. Numbers Game

    Costs for selections are propagated from a pricing database that is generated from actual jobs produced by Parsons’ company. “Instead of using a national database, these are real work numbers that are tried and tested,” Parsons says. New remodelers can rely on a database, which Design Build Profit can provide.

Neil Parsons, a former remodeler and the owner of consulting company Design Build Profit, in Toms River, N.J., was not the first remodeler to give clients a detailed estimate. But, he says, his estimating system is unique because it divides a project into 47 cost categories “common and recognizable to a homeowner.”

The page above is one of about 60 pages in Parsons’ estimating system, which includes a master price list; an assembly page, which details the take-off and quantity and all the tasks required to complete a project; a financials page, which Parsons uses, along with a mortgage calculator, to discuss with clients whether they will need to borrow money from a lending institution and to show them a monthly budget; and an estimated vs. actual page for production to track.

“Ninety percent of the time this estimate is generated at the initial meeting,” Parsons says. “Then we give the customer an accurate price pledge.” He also offers a price-match guarantee, he says, “provided that the other remodeler meets certain industry criteria: association member, has insurance, follows lead-safe practices. Your cousin ... with no workers’ comp won’t qualify.”

—Stacey Freed, senior editor, REMODELING.