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Cost Planning

Know the number before you give the client a number

The client asks what the job will cost and you give them a figure from memory. Early stage cost planning is about not doing that: measuring what's drawn first, so the first number you say is one you can keep.

The client asks what the job will cost. You've got a feel for it, a figure in your head based on similar jobs you've done before. You give them that figure because they're waiting for an answer and you don't want to look like you don't know your own trade. That moment, more than any spreadsheet, is where early stage cost planning either happens or doesn't.

Then you actually measure the job properly, weeks later, and the real number is a good way off what you told them. Now you're either explaining an increase to a client who's already anchored on the first figure, or you're eating the difference to keep them happy.

A gut feel isn't a cost, it's a guess with confidence

Every contractor has a rough sense of what a job like this "usually" costs. That sense is built from past jobs, and past jobs are never identical to the one in front of you. Different quantities, different site conditions, different specification, different rates depending on when and where you're pricing. A gut feel can be close. It can also be a long way out, and you won't know which until the job's actually measured.

The problem is that the client can't tell the difference. To them, a figure you said out loud is a figure. They take it to the bank, to their partner, to the architect. By the time you come back with the measured number, they've made decisions around the first one.

Why the first number sticks

People anchor on the first figure they hear. It's not unreasonable. They asked a professional and got an answer. If the real cost turns out higher, it doesn't feel to them like the job got measured. It feels like the price went up.

Say you tell a homeowner an extension will be around a certain figure, and the measured cost comes back a fifth higher. You haven't done anything wrong on the second number. But the conversation you now have to have is about the first one, and it's you who looks unreliable, even though the measured figure is the honest one.

It works the other way too. Guess high and a client who's shopping around may never call you back. You lose the job without anyone ever measuring it, and you never find out that your price would have been competitive if you'd done the work first. That's a loss that doesn't show up anywhere, which is exactly why it keeps happening.

Good early stage cost planning isn't about being precise to the pound on day one. It's about the first number being built from something real, so that when it moves, you can show why.

A price you have to revise later costs you the client's confidence, even if the final figure turns out to be right.

Early stage cost planning when the drawings aren't finished

The usual objection is that early on there isn't enough information to measure. The drawings are planning drawings. The spec is a few lines. The structural design isn't done. All true, and it's not a reason to fall back on a gut feel. It's a reason to measure what's there and be clear about what isn't.

  1. Measure what's drawn. Floor areas, wall lengths, roof area, openings. Even planning drawings give you most of the big quantities, and those drive most of the cost.
  2. List the assumptions. Foundation type, floor construction, level of finish. Write down what you've assumed so the client can see it.
  3. Price the unknowns separately. Where something genuinely can't be measured yet, give it its own allowance rather than hiding it in a rate.
  4. Give the number with its basis. A figure with a short list of what it includes and excludes is far harder to misread than a figure on its own.
  5. Update it as drawings develop. When the next set arrives, re-measure what changed rather than starting again.

That last step matters more than it sounds. A cost plan that's built from measured quantities can be updated line by line as the design moves. One built from a feel can only be replaced. There's more on handling that in cost planning that survives the drawings changing.

Measure it before you commit to a figure

The way to avoid handing a client a number you'll regret is to know the real cost before you say anything, not after. That means getting the job measured, properly, off the actual drawings, before you commit to a price you'll be held to.

We measure every job to NRM2 and price it against current UK rates, so what you're working from is a real bill of quantities, not an impression. You can see exactly what's in the number, trade by trade, before it ever reaches the client. If something's been assumed, it says so.

It also changes the conversation. Instead of defending a number, you're walking the client through what drives it. If they want to bring the cost down, you can show them which elements carry the money. That's a much better place to be than arguing about why the figure moved. And if the design changes later, the early cost plan becomes the baseline you measure the change against, rather than a number everyone would prefer to forget.

What to say when the client wants a number today

Sometimes you can't avoid the question on the spot. Fine. The rule of thumb is simple: never give a single figure you haven't measured. Say you'll come back with a measured number, and give a date. Most clients respect that far more than a quick answer that moves later.

Say the number once, and mean it. Get the real number first, then say it.