Without a full-time construction estimator on your staff, finding new projects to bid on might take up your whole day. The energy required to concentrate on customer service, team management, and real construction is depleted by early morning calls to substitutes and late-night spreadsheets. Not to mention the time you wished you could spend with family or, gasp, on a pastime.
So how can you improve the bidding process by employing precise pricing that will win contracts and generate profits? Here are four estimation suggestions to make the difficult job of determining prices more automated (and, dare we say, enjoyable?)
Verify Your Construction Cost Sources
It’s evident that the cost of supplies and equipment changes almost every day, even if you only buy at large boxes sometimes. In light of rising costs for concrete and gypsum, the high lumber prices we’ve experienced over the previous year are now declining. What sources of building cost information can you genuinely rely on?
Let’s first determine where you now get the costs for building materials:
- Cost of paper books annually
- Your own historical information from earlier projects
- Making weekly calls to suppliers
- A magic 8 ball (just kidding, but that would be awesome)
These are not without issues.
Even before you open annual paper cost books, they are stale. These print out data that is at the national level and can never keep up with the local pricing that are updated in real-time so you can compete in your niche market. A digital cost book, even one that is released on a quarterly basis, is only a searchable replica of its paper counterpart, including static information on national building costs. Overall, you don’t get the region-specific expenses and estimates you need every week.
Any price information you’ve accumulated from years of projects also can’t keep up. Supply networks and material inventories are different in the construction industry now than they were before COVID. Even if a project’s scale is almost comparable, pricing variations for construction materials are all too prevalent, making it impossible to estimate what you will pay in 2023.
You and I both know that you don’t have time to keep calling for prices on every spool of wire or window casing this week. Even texting or emailing suppliers takes a ton of time, and it’s simple to forget the figures you required yesterday.
The remedy? The closest thing to a crystal ball is Constructem integrated cost data database. Real-time pricing is offered for each area you service for every line item (whether it be material, equipment, or labor). Simply choose the required component, modify quantity, and include any construction calculations to get the total cost. Need a profit margin, markup, or particular tax? There is no issue. All of these may be computed in a single build.
Upgrade Your Technology
Even the greatest contractors have been known to experience delays as a result of antiquated processes, such as paper takeoffs, cumbersome spreadsheets, and manual computations. However, in order to complete any endeavor, you must have the appropriate tools. Your estimation technique is also accurate in this regard.
But how do you get started? Here are three features that your future building estimate tool must have:
- With precise, current pricing, a searchable building materials library
- You may repeat projects and utilize templates with a flexible estimate creator.
- Quickly connect with clients by sharing proposals easily
Consider how much quicker your estimate procedure will be if you had a tech instrument to manage these responsibilities! Faster equates to more time to go back to creating or to finally take that much-needed vacation.
Create efficient estimation templates
Avoiding needless rework is the easiest method to expedite your everyday estimation chores. Exactly how do you go about doing this the simplest manner possible? Create reusable templates for future projects to begin ones with a comparable scope.
When creating a template that works for you, bear the following points in mind. Since you won’t often bid on projects that are exactly the same, it need not include the complete job. However, components that are recyclable and used in other building estimates, such as wall assemblies, roof framing, flooring scope, or collections of mechanical items, are ideal for templates.
Reusable template creation with constructem is simple. Once you have groups of things you are certain you will need on various tasks, you can drag and drop them into your estimate to update their costs based on current local prices. This also applies to overhead costs with a defined amount, such as liability insurance or worksite trailers.
Offer for Projects that Support Your Business Goals
Not every bid request is worthwhile pursuing, particularly if it doesn’t align with your company objectives, despite how unproductive it may seem. Here are some questions to help you decide which offers to estimate and which to reject:
- Does the project match your present team, supply pool, and workflow?
- Will your company be supported for many months by a single, more successful project? Do you feel prepared for it?
- Or, given where your contracting business is at the moment, do you need a number of smaller, related projects?
It will be easier for you to decide which bids to accept and which to estimate if you are aware of the project categories, the number of projects you need to bid on, your win rate, the number of projects you must win, and the profit you must earn. The usual rule of thumb is that an invitation to bid is inappropriate for your firm if it hinders your ability to accomplish your objectives.
Why is this crucial, then? Spending time pursuing projects that won’t bring in money or help your contracting firm expand is a waste of time when you might be spending that time estimating jobs that will pay off and advance your career. Even if a project seems exciting or well-known, it may not be the best match. Furthermore, it is never a good strategy to accept every RFQ.
Start exercising time management skills.
Take constructem for a test drive and see how estimating supported by real-time, local cost data can make those paper cost books appear like a horrible dream as you go through upgrading your process to save time and win more bids. Get all the information you want to start simplifying estimating by learning more.
Also Read: Strategies To Expand Construction Business