How much should I spend on estimating software?
We all know that, in life, the cheapest option is rarely the best. On the building site, it’s better to have the right tool for the job rather than the cheapest. Buying cheap often leads to additional expense further down the track when you need to upgrade or replace a sub-standard bit of kit.
The same can be said for the estimating solution you choose. Estimating software is one area of your business where you certainly shouldn’t scrimp. The same goes for an estimating service, if you choose to go down that route. The solution you choose will have a role in whether you win work; it’ll play a part in whether you make a profit or a loss. You want to choose a solution that will cover all the types of work you do and grow with your business.
It’s difficult to put a figure on how much you should spend on estimating software for your building firm – it depends on the type of work you undertake and the direction you want to take your business in. But if you’re looking for high-quality software, these are the things you should look out for.
SMART CLIENT-WINNING QUOTES
What’s the point of a budget estimating software package or estimating service if it doesn’t win you the work? A professional-looking, detailed quote is key to securing the profitable jobs you want to be doing. A high-quality quote can win a customer’s confidence. Indeed, HBXL, who develop software solutions for small to medium-size builders, found that estimates produced with market-leading EstimatorXpess increase the user’s win rate by 230%. BuildingWorks also produces an automated customer quotation and is worth checking out.
A RANGE OF REPORTS TO HELP YOU HOLD ONTO YOUR PROFIT
If you choose estimating software which automatically produces project management and cost reports, you’ll save heaps of time and stay on top of the project and its costs. EstimatorXpess and BuildingWorks produce a variety of reports including material order schedules, labour schedules, cost breakdowns, profit forecasts, cashflow reports and more. Having a clear view on your build programme and you income and outgoings, will enable you to stay firmly in control of costs and – crucially - profit.
UP-TO-DATE MATERIAL PRICES DOWNLOADED INTO YOUR ESTIMATES
It’s essential to look for estimating software which gives you regular material price updates. With construction cost inflation currently tracking at around 20% per annum, year on year, quoting with out-of-date prices will leave a big hole in you profits. Ideally, you want to be able to download the latest material prices directly into your software as you can do with EstimatorXpess and BuildingWorks. EstimatorXpess prices are updated once a month while BuildingWorks prices are updated quarterly.
ALL THE EXTRAS ACCOUNTED FOR: WASTAGE, OVERHEADS, INFLATION AND PROFIT
The best estimating software will also take account of the extra costs which, if overlooked, will erode your profits. We’re talking about wastage (breakages, items “going walkies” etc.), company overheads and inflation. Make sure the software you choose adds these costs to your estimates as that’s the only way you’re only likely to make a decent profit. And that leads us onto the final point – profit. Ensure the estimating solution you choose allows you to set your own profit markup. Software such as BuildingWorks and EstimatorXpess can do all of this for you.
THE ANSWER
How much you should spend depends on the needs of your business. There’s no point in going for a basic package which you may quickly outgrow - or one which will give you an inaccurate estimate. If you’re going to invest in estimating software, don’t take a risk with a cheaper option. The best estimating software will pay for itself before you’ve completed your first project with it. The value of a professional, accurate estimate, and a raft or reports to help you plan and manage the project effectively, cannot be overestimated. Take your time to research the best solution for your needs. Chances are, it won’t be the cheapest option out there.