No matter your size, many contractors struggle when it comes to estimating and focusing on the best, most profitable work. Estimating is rife with obstacles—from rushing to bid work to not being selective enough in the bidding process. But avoiding the pitfalls of estimating isn’t about working harder, it’s really about working smarter.
When you’re more deliberate in your estimating strategy, you can begin to see immediate results. It’s critical to take an honest look at your process, pinpoint risks, and plan how to manage them better. Let’s review a few high-level strategies to apply to your construction estimating process.
Bid What You Do Best
How do you strike a happy balance between bidding and winning enough work and the right work? First, stop bidding every job in your local plan room. Step back and focus on the most profitable projects in the right market, business segment, or geographic area.
When you’re not selective, you could put your firm’s reputation at risk. Will customers trust you if you fail to deliver as promised? Some contractors build new homes while others specialize in remodeling. In down economic times, the remodeling specialty might serve you better. By slowing down and being patient, you can highlight your strengths to beat the competition.
Some experts say that companies that offer specialized services win almost twice as many bids compared to firms offering general construction services. Here are a few specialization categories to consider:
● Government jobs
● Hospitals and medical facilities
● Schools and universities
● Renovation and adaptive reuse
● Sustainable building
Catch Problems Early
Nobody wants to expose their company to unnecessary risk by failing to prepare an accurate estimate. This can easily happen if you don’t assess the full scope and requirements of a project or take the proper time to prepare the bid in a professional, polished package with detailed calculations.
It’s also important to remember that no project is ever perfect. Material shipments may run late, subcontractors may fall behind, and schedules will need adjusting. The field and the office need to be on the same page to catch problems early. You don’t want the last 5% of the job to drain 50% of your profits.
One way to avoid this is by using the right digital tools for takeoff, estimating, and production tracking. With construction software, your estimator can kick the project off in the right direction. Production tracking tools are used to digitally track cost-overruns and payroll. Tracking productivity throughout the job can show if you’re over-budget. With the actual hours and cost in hand, an estimator will apply this historical knowledge to the next bid.
Bid More. Win More. Repeat.
With today’s hot construction market, it’s the perfect time for contractors to make course corrections to keep from being hemmed in by construction estimating barriers. By staying focused and using the right tools, you can grow your business, sustain profitability, and streamline your estimating process.
Want to learn more? On Center Software can show you how to bid what you do best and lessen your risk. Get our whitepaper, Overcoming the Pitfalls of Estimating, for more winning strategies.
Allen Crowley, is director of business development for On Center Software.