How much could flaws in your commercial construction cost estimating process be costing your business? As mentioned in Construction Business Owner Magazine, an error-filled estimating process can result in project delays, cost overruns, and problems in otherwise great customer relationships. To avoid these challenges for your commercial construction company, you can use data to understand where your company needs to go and create accurate, job-winning estimates.
Build a Solid Estimating System
Estimates are a guideline for work and expenses that haven’t yet occurred, but things can change once work begins. Estimators often rely upon years of experience to prepare their estimates. While this process sometimes “works magic,” if you’re undertaking a new type of project or one that you’ve done before, your experience with other types and sizes of jobs might steer you in the wrong direction.
You need to build a solid and consistent estimating system as a strong base for your commercial construction company. Not only will an improved system help you improve your profit margin, but you will also be able to learn your strengths and weaknesses as a company. Start with a complete scope of work. This shouldn’t just consist of fixed costs like insurance, taxes, and accounting/bookkeeping; you should also include time frames and required tasks.
In addition, your company’s fixed costs should be accurate and include office rent, insurance, accounting, and administration. ProEst offers an intuitive way to speed up the part of your estimating work that you may have traditionally spent hours on, like doing takeoffs and estimating materials costs. You can then use your time more efficiently to build an estimating system that works for your company.
Use Project History to Benefit Your Business
You can analyze your previous projects for efficiency and use what you learn to guide your future bids and estimates. Construction Business Owner columnist George Hedley recommends using a project history library to guide your future project bids, estimates, and business priorities. ProEst is designed to help you in this process, offering reports and instant access to past estimates, project budgets, and bid sheets.
Not only can you quickly access similar estimates from past projects, but you can also use ProEst’s intuitive interface to make quick changes and adjustments. If you feel that you underbid in the past, you can add markups to create a more profitable bid for the job at hand.
Choose Which Projects to Bid On
How many times have you gone through paper bid sheets from the past to review a bid and analyze project profitability and used the results to pick and choose which bids you’ll respond to in the future? Looking at trends and project categories is difficult, if not nearly impossible, using manual methods. ProEst’s reporting capabilities will let you analyze which types of jobs are most profitable for your commercial construction company. They’ll also give you a quick idea of jobs that you’d be better off leaving to other construction companies.
Refine Project Costs and Processes
ProEst has a built-in general contractor database that enables you to set your estimating database up in CSI 48 division format. You can perform unlimited sort types, which will allow you to drill down into the details of your work. You may discover certain aspects of your workflow that haven’t changed for a long time but are a quick fix. You can also analyze project cost centers in depth and detail and uncover potential bottlenecks or processes that you can revamp to strengthen your efficiency and improve your bottom line.
See Clearly Which Customers Are Your Most Profitable
Not all customers are the same, and you could have a regular client who is a “hidden money pit.” Whether it’s due to a client who issues many RFIs or is constantly putting in change orders, you can review jobs over time and prepare reports that will show you which customers and jobs are meeting or exceeding your desired profit margin and which ones are costing you more than average and bringing down your bottom line.
Set a Bidding Accuracy Goal
Bidding accuracy is the number-one goal of every commercial construction cost estimating process. ProEst is designed to make it easy for you to review labor, material, equipment, and subcontracting costs and make any changes necessary to achieve a high rate of bidding accuracy. ProEst is the most efficient and effective way to improve bidding accuracy, and it’s fully integrated with the RSMeans database and ProCore.
If you want to improve your commercial construction cost estimation process, you shouldn’t “lose sight of the forest for the trees.” You can be spot on with your materials estimates but have wide variations in your scope of work and schedule, leading to cost overruns later on. It’s also hard to get a grasp of trends in your company’s work processes or spot bottlenecks that you could fix with new equipment or work procedures. Without the help of software that can help you see past jobs, look at past bids and run reports that analyze them. ProEst offers you the ability to do all these things effectively. It is a powerful construction company cost estimating tool that can help you improve your cost estimating from both a financial and a business management perspective.
ProEst is a cloud-based pre-construction estimating platform that helps you create accurate estimates and digital takeoffs directly from blueprints quickly, allowing you to determine the most favorable rates for your company within the estimation process. There’s no guesswork involved. ProEst makes quality assurance in commercial construction projects estimation effortless. You won’t have to engage your entire team to be sure your numbers are accurate.
If you would like to learn more about how your commercial construction company can increase its profits and reduce miscalculations during the estimation process, reach out today and schedule a 1-on-1 walkthrough with one of our specialists!