Moving on from estimating with spreadsheets

Many builders are quite happy with their spreadsheet-based method of estimating. Unfortunately, they risk being left behind by forward-thinking building firms who are taking a different approach. Savvy builders are costing their projects with estimating software designed specifically for small to medium-sized building firms, meaning they’re able to accurately calculate their costs, work efficiently and - ultimately - make more money.

Stamp out errors

To ensure you make the profit you deserve for the standard of work you’re producing, it’s crucial that you have an accurate estimate of the work from the outset. If you estimate using a spreadsheet, chances are there will be mistakes in your estimate. In fact, research by the University of Hawaii has shown that 88% of spreadsheets contain errors. As you type figures into row upon row of data, copying and pasting dimensions and calculations from one cell to another, errors can easily creep in. And this inevitably lead to you putting your hand in your own pocket to correct the mistakes.

Charge for everything

That’s not to mention oversights. Do you account for every last item in your estimate? Every last nail, tin of paint, tube of sealant? You should be charging for everything; missed items will eat into your profits. This is where estimating software comes to your aid. Estimating software, such as market-leading EstimatorXpress, comes pre-loaded with all of the material (and labour and plant) calculations for each task, making oversights a thing of the past.

And just a note on new builds. For new homes, construction costs only account for around 50% of the budget. The other 50% goes towards architect’s fees, site acquisition, finance costs and preliminaries. It’s easy to forget to fully account for these costs in your estimate. The result? Diminishing profits. The beauty of estimating software is that you’ll be reminded to add these costs to your estimate every time.

If somehow you avoid any mistakes or oversights in the construction costs and preliminaries, your spreadsheet may be losing you money elsewhere, by failing to add on costs which are incurred in every project. I’m talking about wear and tear, theft or breakages, not to mention company overheads, inflation and VAT. Proper accounting of these costs can make the difference between earning a profit and not. And - you guessed it - estimating software is the hero once again, automatically adding a wastage percentage to cover wear and tear and losses, and prompting you to add an overheads, inflation and VAT markup to your estimate.

Quote with up-to-date prices

As you’re no doubt aware, material prices are increasing rapidly with inflation currently pushing 10%. To protect your bottom line, your estimates must be based on the latest prices. If you’re estimating with your trusty old spreadsheet, that means spending hours ringing around merchants or trawling the internet, checking the latest prices. If you’re using estimating software, it means clicking “download” on the latest material price update and watching the new prices appear in your software. The best estimating software providers will review and update their material prices quarterly, if not monthly, so they’re doing all the research for you.

Get ahead of inflation

Quoting with the right prices doesn’t end there. If you price up work using today’s prices, you can be sure that the materials will be more expensive in a few months’ time when the project begins. Moreover, for the duration of the project, costs will continue to rise. That means that if you estimate with today’s prices rather than the prices you pay when you order the materials, you risk losing thousands of pounds. Builders using estimating software have the advantage of built-in inflation calculators which estimate how much each resource will increase by, between the estimate date and the date it’s ordered. The result?  The customer pays the true cost of the project and the builder doesn’t take a hit.

Manage your projects effectively

Making a decent profit goes beyond putting together an accurate quotation. Estimating software can protect your precious profit all the way through to completion. Many software packages boast project management tools to help you manage your projects better. For example, EstimatorXpress and BuildingWorks automatically generate a suggested build programme, based on the labour calculations in your estimate. With this on your office wall, you’ll always have the right teams on site, with the materials and plant they need, at the right time.

Both EstimatorXpress and BuildingWorks also generate a range of reports, from material schedules and plant task lists, to profit and cashflow projection reports, without you lifting a finger. Having this data at your disposal will help improve your productivity and ensure you run a highly efficient and profitable project.

Make the leap towards estimating software

If you’re looking to fix the cracks in your admin, work smarter and grow your profits, it’s the time to move away from spreadsheets. Plan for a successful future for your building firm and add estimating software to your kit.