Quoting jobs and estimating brings many frustrations and challenges! In my previous article I shared two of the five lessons I’ve learned about quoting correctly, from my time coaching builders. They are…
- Know your limits: don’t rush into preparing a quote by hoping for the best. Use your skills wisely and outsource the areas you’re not so skilled in, i.e. use quoting/estimating software.
- Know when to estimate: Don’t feel pressured into fixed price quoting, rather, talk to your clients about estimates with quoted rates. Read more
So what are the other three lessons you learned?”
3. HIGHLIGHT UNCERTAIN AREAS
Sometimes there are parts of a job that you are unable to quote accurately. It may be that you simply don’t have the expertise, or that there are too many variables.
Should this be the case, then don’t be afraid to separate the uncertain parts from the fixed part of your quote. Give those uncertain parts a rough estimate (if you can), but make sure that your client understands which is which.
4. USE A QUANTITY SURVEYOR
There is no argument that correct quantities are important for developing accurate quotes – that and spot on labor forecasting. You can ensure that you have accurate quantities by paying for a professional quantity surveyor to help on your jobs.
Instead of laboring over numbers and quantities you’re not sure are right, spend the time more profitably improving the other components of a great quote. For example, reviewing the plans and coming up with the best build processes so you can reassure the client you really are the best choice of builder.
Also, as a result of pouring over the plans, you may well be better equipped to assess whether or not your team can complete the job in the hours the QS has estimated. Or, whether you need to allow more time because of the complexity of certain construction details you suspect will take your team longer.
5. BACK COST PREVIOUS JOBS
Henry Ford said, “history is bunk,” but a contemporary of his also said, “those who cannot remember the past are condemned to repeat it” (George Santayana).
And how true this is in a building business. For example, the builder who heads straight into the next job without back-costing the previous one is highly likely to repeat any mistakes in the new job.
Back costing is the only way to get real information about the performance of yourself and your team. If you estimated 500 hours for a job and it actually took you 650, then next time around you should allow 650. You need to adjust your estimating formulae.
It sounds like common sense, but I have met builders who keep estimating with the same formulae – after they have lost money! They then wonder why they are not making a profit.
While it may be time consuming, it’s worth the effort to back cost every quoted and estimated job. By doing so, you build up a record of your team’s performance so you can estimate jobs more accurately in the future.
Getting your quoting right is really important in building a long-term secure business. So make sure that you don’t leap into giving quotes just to stay in the game. Doing so may put you out!
How do you ensure you’re quoting correctly?
Below are some responses from builders to the question “What’s your biggest frustration when it comes to quoting correctly?”
Do you have similar frustrations when it comes to quoting? If so check out the links to other articles I’ve written to help in these specific areas.
- Wasting time by searching suppliers for the ‘best price’.
* Six ways to cut costs and save your building clients money
- Hours of unpaid time wasted writing quotes that don’t go anywhere
* The secret to raising your conversion rate