Know Your Numbers When Estimating Webinar
Hi everyone, per usual I have written up a debriefing of our latest Webinar “Knowing Your Numbers When Estimating” hosted by Wyatt Knight and Karine Woodman.
This Webinar was focused on bringing you insight on how to be more efficient, accurate and profitable when estimating. We went through a number of tactics to achieve this with the bottom line notion being that you can’t manage what you can’t measure. Meaning, you must outline all of your expenses before putting together a bid. In order to be profitable, our income must outweigh our costs. Let’s break down how to be more profitable when estimating.
Calculate Fully Burdened Labor
- One of the biggest business cripplers
- Ignoring the actual labor burden can kill your profits at job conclusion
- Labor should be thought of as more than just hours into jobs and wages
- Taxes, benefits, workers comp, uniforms, cell phones, truck, tools, bonuses, travel, meals, non-billable hours etc. These are all expenses an employee can burden your company with.
- For example, you have an employee who makes $25/hour. Add up all those extra labor costs and you might end up paying him $45/hour. You have got to factor this into your bids.
Proper markup for profit
- Understand your overhead expenses
- Any expense you can bill to the job.
- Factor this and your labor burden into your markup
- Use Quickbooks to track various types of expenses. Tell Quickbooks to bring in this info automatically. You can’t manage what you can’t measure. Know where your numbers are. When you know where they are, you can price things out properly. Track your projects to know where key markups can be made
Estimate in a sequential path
- Create phases or categories you can work with. Ask yourself, what is the first thing we have to do with this process? Develop a list from there, going in order of what works best for you. Eventually, it will become routine and easy to remember. When you know what to do, you’d be surprised how quickly estimating can take place.
- How it is going to get built should be how it is going to get estimated. This allows for a nice fluid estimate that can be read very easily.
Templates, Assemblies & Systems
- Take advantage of templates!
- We offer templates for a reason – they make estimating super easy. We like to think of our templates as getting you 80% of the way there. All you have to do is enter the square footage and review the line items. Templates are an extremely powerful feature. Learn more about them here.
- Creating assemblies and systems will improve accuracy, eliminate mistakes and allow you to track and update line items. When each item has a code associated with it, you can track it in more than just our software. Make estimating a fluid process
Benefits of Unit Pricing
- Have your subcontractor get you unit pricing rather than lump sum estimates. This allows you know their costs ahead of time. Waiting on an estimate from a subcontractor can chew up a lot of time and resources, especially if you are doing it for every little job.
Properly Utilizing a Database
- This allows you to build a catalog, ultimately eliminating delays when subcontractors are not available. Make future estimates faster and more accurately with a database. Need to quickly find a part? Need to quickly change the price of something? This is how you do it.
Utilize Available Technology
- Use applications and different types of software to help organize your business. You’ll find that even a handful of tools will greatly help your organization. There are various scheduling, integration and communication tools that your whole team can be a part of.
Cost codes & Tracking Job Costs
- Apply a cost code to track individual items. This is very similar to “Properly Utilizing a Database”. You can’t manage what you can’t measure. Identify trends, mark them and make future estimates easier to generate. Customize this to fit your style, allowing you a quick search when you need something specific.
Thanks to everyone who has shown interest in this webinar, we hope you enjoyed it and that your estimating has improved! If you have any webinar topics you would like to share with us, please do not hesitate to send an email to firstname.lastname@example.org. We would love to hear from you.
You can watch the Webinar here.