software consulting, custom reporting, financial resources

Articles:

Credit Card Transactions

Entering Fixed Assets as Journal Entries

Estimating

Estimating-At-A-Glance

Estimating, Project Management Overview

Paying Liabilities and Transfers Between Accounts

Payroll Overview

Profitability

Proposals

Profits - Strategies to Improve

Responsibility As A Motivator

Risk Management

Schedule Variance

Take Your Business to the Next Level

Teamwork As A Motivator

Time Management

Time Management Matrix

Timetable of Procedures

The Balance Sheet, Part 1

The Balance Sheet, Part 2

The Balance Sheet, Part 3

The Balance Sheet, Part 4

Training Saves Money

Value As A Motivator

Year-end Close

Estimating

Estimating is a process of learning to predict the future, based on performance in the past. Why do we want to learn to estimate better?

Improve productivity; Increase profits; Improve cash flow; Save money; Bid more work; Etc., etc. It all comes down to making more money.

Here are some concrete steps you can take in your estimating process right away:

I. Estimate jobs you want and can get:

Know what type of jobs are profitable.
Example: A concrete subcontractor may make money on foundation work, but not on flatwork. Therefore, he shouldn’t take jobs which are only flatwork.
Who are the other bidders?
How many are there? If there are ten, then there is a good chance that one of them will make a mistake.
Are there bidders who consistently beat your bid?
Who is the owner?
Do they pay slow? (This can wreak havoc on your cash flow.)
Are they high maintenance? (Every conversation you have with them uses your time, and time is money.)
Who is the architect?
Slow response? (Delays in their response cause you to stop work or change direction. This results in a loss in momentum and workers feel there is no plan for accomplishing the work.)
Disorganized when answers are needed (e.g. concerning Change Orders, etc.).
No give-and-take. (This is frustrating, it can kill your energy and momentum.)

II. There is no reason to bid to:

Bid shoppers. If you feel you must, then give them a higher price, but not always the same percentage higher so they will not be able to detect a pattern.

III. Don’t guess:

Measure the plans yourself.
Supplier’s takeoff lists for a project may be wrong.
Check subcontractor’s quantities. Inform them if you disagree with their quantities.
Finding a subcontractor’s quantity shortage one or two times may cause them to be more comfortable in bidding and working with you. This often results in lower bids and a better working relationship.
Get dollar amounts on everything.
If unsure about anything, then add to contingency for the unknown.

IV. Estimate accurately:

Use job cost info to tune up costs and production rates.
Calculate the exact quantity needed.
Add a close percentage for waste.
Add reasonable contingency. (Don’t pad the numbers all along.)

V. Develop efficient and accurate systems:

Yellow Pad v. Excel v. Database.
Speed: is it faster to bid based on unit price or parts/assemblies?
Accuracy: which method is more accurate for you?.

You may be bidding high because of excess contingency, guessing, etc.

Or you may be bidding low and have to pull your bid. After a few times of pulling your bid you may not be able to bid to those prospects.

Manual vs. Calculator vs. Computer: which works best for you?

In terms of speed, accuracy.
More estimates may mean:
More work.
Same bid volume, but more profit.

An efficient system should allow you to produce quality estimates in half the time.

One system which works for many Master Builder customers is to bid quickly, using whatever method the estimator is comfortable as long as the estimator is positive that the bids are making money, then use the MB Estimating module to make sure the jobs are profitable once the job is sold.

In order to use the MB Estimating module well, there will be a large investment of time to set it up. The payoff will be speed and accuracy, plus the ability to export a budget, proposal, purchase orders, subcontracts and RFPs in a couple of clicks each.

Several items should be addressed prior to implementing the Master Builder Estimating module. Good planning will yield better results. And a commitment to many hands-on hours invested in setting it up will yield a very large amount of time saved in the long run.

VI. Research & Planning

A. What is my final goal?

Which of the following will I be using?

Assemblies
Grids
Grids with Formulas
Templates
Assemblies with Formulas

B. What do I need?

1. Parts for estimating

How many Parts?
One-time prices or regularly-updated prices?

2. Assemblies for estimating

What aspects of construction?
How many Assemblies?

C. What parts and/or assembly databases are available?

1. Master Builder (Parts & Assemblies built in-house)

2. Vendors (Parts Only)

3. Other sources (national database source)

D. What other time-saving methods and procedures can I employ?

1. Importing Parts

2. Using Assemblies

3. Using Grid Templates

4. Using full job templates.

To discuss implementing Master Builder's estimating module and related project management features, please contact:

Andy King
T: 805-771-8400
service@missiondevelopment.com