Estimate Smarter: 6 Steps Before You Bid a Job
BY Bill Stanley
You don’t get paid what you’re worth—you get paid what you estimate. Industry leader Bill Stanley shares how he protects his profits by sizing up clients, projects, and timing before he ever puts pen to paper.
“I deserve to profit from my hard work.” Reread that. Commit it to memory. Make it your mantra. I’ve made it mine. Let me explain with a story.
A long time ago, I arrived to estimate a small commercial project. The business owner eyed my shiny new truck and said, “I’m not paying for that fancy truck of yours.” This isn’t the first time someone implied that an asphalt professional shouldn’t be able to afford nice things.
I wanted to tell the guy his small project wouldn’t pay for one truck tire, but instead I said this: “You have two options: hire an unsuccessful contractor who won’t answer your call when your lot falls apart in a few years because he’s out of business, or hire a successful contractor like me.” He hired me.
Getting paid what you’re worth is so important that it was the first topic I ever wrote about for AsphaltPro, so it should come as no surprise that an article about estimating would start with knowing your worth.
Once you’ve understood that much, here is my approach to the estimating process that I use to ensure my business is as profitable as possible. There’s a whole lot that happens before I ever put pen to paper—we’ll cover that in this issue and the rest of my estimating process in the July issue.
Step 1: Consider economic conditions.
Profitable estimating starts well before a prospective customer calls you for a quote. First, by considering the economic conditions you’re working in. In the May issue of AsphaltPro, I predicted that we’re entering a ‘Golden Age of Paving’ with my advice on how to level up your asphalt business.
If I’m right, this means we at American Pavement Specialists are going to get even pickier with our projects. That means focusing on work that is most profitable for us and choosing our customers wisely.
During this time, we want to focus on established customers who have solid funding. It’s a bit counter-intuitive, but it makes sense if you read the example I shared in the May 2025 issue about how APS had our best year ever in 2008 during the Great Recession—because the only people who had hired us were well-established companies.
On the flip side, when the economic outlook is positive, companies may bite off more than they can chew. This can be particularly dangerous for the asphalt contractor because we’re the last one in and the last one to be paid. Will that speculative client building a new strip mall have enough money left to pay you by the time the project is finished–after he’s paid every contractor who came before you? You can bet I’m going to do extra due diligence on the project owner or general contractor for a project like that, especially if there’s plenty of other, less-risky work to be had.
Choosing the right project starts with identifying work that fits your business model, Stanley said—like this well-funded, clearly scoped residential development.
Step 2: Consider the time of year.
For any paving contractor, January through March is a nail-biting time. Until there’s work on the books, you want to be sure you can guarantee 40 hours a week for the crew coming back at season start-up. For this reason, many contractors bid more cautiously in the pre-season. As the books fill up, our confidence grows and we become more selective with the work we fill the remainder of our books with.
For example, we started the 2025 season with 20 miles of municipal road work scheduled in small towns in our area. This staple work isn’t hugely profitable, but it keeps things stable. Having this work in the books allows us to go after only the projects that are perfect for us.
Even the estimating process can be lengthy—and that costs me money, too. People love to ask for a “free estimate,” and sure, the estimate might be free on paper, but my time isn’t. I hate when someone expects me to spend hours reviewing plans, making calls, or driving to a site, like that time doesn’t have value. When you’re running a business, time is one of your most expensive resources, and giving it away for free adds up fast.
Step 3: Understand the difference between bids and estimates–and prioritize accordingly.
Many years ago, a prospective new customer was hounding me for a bid on a driveway. He insisted I meet him at the project site on a Sunday morning. When I arrived, he’s standing in front of a densely wooded lot. He hadn’t even bought it yet and he was trying to get an estimate on the driveway!
There’s only so much time in a day, so many days in a week, so many weeks in a year. Given that reality, I’m going to prioritize estimating projects happening this paving season above those happening next year (or later). This is equally true of bids requested by general contractors who haven’t yet won the bid themselves.
The closer the project is to paving also simplifies the estimating process and increases the accuracy of my bid. How accurate could my driveway bid have been when all I see is a wooded lot? The same is true for an empty field that will one day, several years from now, contain a fulfillment center, strip mall or apartment complex.
The quicker the customer wants paving to begin will also speed up my estimating process. If a prospective customer calls and says they want the project done in three weeks, we’re going to get started on the estimate immediately. If the project’s slated for two years from now, I’m probably not going to spend an hour discussing the nitty gritty details of that project when they’re likely to change by the time the paver touches the ground.
We often get emails from multiple general contractors bidding on the same project. This gives us a chance to duplicate our bid and increase our chances of getting the job regardless of which GC wins the bid.
Step 4: Never underestimate the value of referrals.
Referrals are the cornerstone of my business. Anytime I receive a phone call from a potential customer, I’m not just on the phone with that customer. I’m on the phone with everyone they know. If they choose to hire APS and we do a good job, you can bet they’re going to refer us to their friends and colleagues. Whether that customer manages 12 apartment complexes or owns 20 Taco Bell franchises, their friends and colleagues are probably in a similar financial situation.
Once I’ve earned my customers’ trust, the whole process becomes much easier for them and for us. They won’t feel the need to collect 10 estimates; we don’t have to trade so many emails and paperwork. Once someone’s a returning customer, all they need to do is call my cell phone and we can work it out for them really quickly.
Earning trust is a two-way street. To protect ourselves, we structure our deposits and progress payments differently, put everything in writing, and charge a higher amount for customers with whom we don’t have a history.
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Step 5: Take your time to determine if the project’s a good fit.
Whenever a new customer requests an estimate, we ask a standard set of questions to gauge how well their project fits into our wheelhouse. We want to know their project timeline and their budget. For example, if they’ve got a budget of $500,000 but the project seems like a $1 million job, that’s going to be a problem. I want to know if the work will be inspected by a third party and if the payment will come from a third party, as well as payment terms and if there will be a retainage involved–among other questions.
My questions probably won’t be the same as yours, because they’re customized to identify the types of work we want to perform, the type of work we’re set up to perform, and the type of work we can perform most profitably. The more of those questions the customer answers the way we’d like them to, the better of a fit the project is for us. If the customer doesn’t answer at least half of those questions the way we want, we’re probably going to refer them to another company that is more aligned with their project.
Step 6: Don’t be afraid to walk away.
The other day, I showed up to a local school system for a mandatory walk through. The project wasn’t even very big–a volleyball court, 600 feet of curb, some maintenance work–but there were 10 other contractors there! Given the project specifics and its location 40 miles from our shop, I realized the chances of being the low bidder on this project was probably slim to none. So, I scratched my name off the sign-in list and walked out.
You know what’s worse than not winning a bid? Not winning a bid while earning yourself a reputation that you’re too expensive. I don’t want that reputation when that same school system requests bids to pave their parking lots, a service for which I know my bid will be very competitive.
It’s also a matter of time. The time I save estimating a project that isn’t a good fit can be spent on projects that are a perfect fit. If our job board isn’t full, I can always reconsider customers who might’ve only answered six (or five, or four) of our target questions right.
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The Bottom Line
If you want to be more successful in your estimating, this starts with knowing what types of projects are most profitable for your company (if you haven’t read this article, go read that now). The second key is to establish an estimating process that sets you up to do more of those profitable projects (and less of the other stuff), as I’ve outlined here. For the third, I’ll go back to where this all started. Remind yourself that you and your company deserve to be profitable for the good work you do.
Stay tuned for the July issue of AsphaltPro, where Bill Stanley will explain the rest of his estimating process, from drafting a preliminary quote (without leaving his office) to closing the deal and building a referral-based business with one new customer at a time.