Estimating software: why now?
You’re really busy. It’s a fact.
Some of you may well be booked into late 2022 (and beyond?). You’re probably happy that you have projects booked in that far in advance as it’s one less thing to worry about. But is being booked up so far ahead a good thing right now? We believe - perhaps counterintuitively - that if you’re not using the right tools to help you then possibly not. And here’s why.
Do you know what the prices will be later in 2022? Do you have a crystal ball? The nearest thing to Mystic Meg is estimating software which has the all-important inflation feature. In fact, construction cost inflation is at its highest for a generation so it is critical you take this seriously if you aren’t already. You also need a contract which allows you to flex the price of the job nearer the time. There is building contracts software on the market which has some nifty clauses which enable you to do that. Did you know many of the ‘big contracts’ e.g. building a hospital for example have clauses in them which allow price reviews and the price is tied to the then market price.
Rising prices neutralise the money that you earn from your building work profits. To judge how much money you are really making, you need to take inflation into account. Ideally, you should be accounting for inflation in your original quote. I should add it’s not about slapping on say 10-15% of your price now for inflation. It’s a bit more complicated than that. The amount of inflation will differ for each resource as they’re ordered at different stages of the build. The cost of materials needed at the end of a 6-month job will rise more than the cost of materials used at the start. So, inflation will have a greater effect on your plastering and decoration materials than on the materials used in your foundations and footings, for example. Software such as EstimatorXpress does all the inflation calculations for you super easily.
Think about the work you have booked in for 2022…
1) Is it REALLY good work? Profitable work? Check now and if you have room for manoeuvre on these jobs do it - at least have the discussion with your client.
2) If you are confident about those 2022 jobs, when will you start quoting for 2023? You may as well get those booked in as really profitable jobs – that means taking account of inflation now.
3) As for the jobs you’re on now, or starting soon, but have won already - run them through software such as EstimatorXpress and check the money you’re going to make and adjust your plan accordingly. You can download a free 14 day trial to do this. Get a Gantt chart (build programme) set up for the job so you can manage it successfully. It’s a running joke that no building project ever goes to program but why not start as you mean to go on? And it can flex and change as the programme does. If profit is going to be tight, getting organised is critical. From your Gantt chart you’ll get materials, labour and plant schedules. We hear frequently that ‘I can just about guestimate the price of the job but then it takes me hours to sort the quantities and scheduling for everything’. EstimatorXpress removes that headache – it does it for you. And as the build program flexes and changes, so will your schedules. We all know right now that builders’ merchants need an epic amount of notice so let’s hand it to them on a plate and get your supplies locked in.
Going back to why now.
You want to win those late 2022/early 2023 jobs at the right price. You want the higher margin jobs. Being busy isn’t enough. You’re in BUSINESS not busy-ness after all. Estimating software such as EstimatorXpress helps you win the higher margin jobs by demonstrating to the client why the job costs what it does, including your inflation calculations, through detailed quotations and reports.