7 ways to increase profits on your construction projects
Suppose we told you that you could be making more money on your building projects? Perhaps you’re not fully maximising your profits? Maybe money is falling through the cracks? Our seven tips will help you hold on to every pound of every job you undertake. And the best part? It requires next-to-no effort on your part.
That said, this article is not about making a quick buck. It’s about setting your building firm up to be a resilient, profit-making business in the long term. Take a quick look through our top seven ways of increasing your profits.
How to maximise your profits on every building project
1 . Value your own time
Think about how much your time is worth. Can you afford to spend a good chunk of your time estimating? Using estimating software, such as EstimatorXpress or Take-off & Estimate Kit, massively reduces the time it takes to complete each estimate. There are better ways you could use that time – whether on the business or on your personal life.
2. Use live material prices
We’re probably stating the obvious here, but if you’re estimating with out-of-date prices, you could be under-quoting by thousands. Keeping on top of the latest material prices is a time-consuming task. There is a quick solution though. EstimatorXpress and Take-off & Estimate Kit update their material prices every month. Use estimating software like this and you’ll always be quoting with the latest prices – that means accurate quotes and no shortfall for you to cover.
3. Include everything in your estimates
You can’t afford to forget anything in your quote. Every missed item comes out of your profits. The solution? If you use software to price your jobs, everything is itemised so there’s no chance of forgetting anything. The software calculates everything, down to the last metre of tile batten, the last nail, the last gutter clip. The software developers have done all the head-scratching for you - so you don’t have to remember every last thing!
4. Don’t forget wastage and wear and tear
It’s unfortunate but it’s the reality of building sites… Tools disappear. Equipment breaks down. Bags of cement get wasted. Nails disappear down the cracks. All of these costs add up. The best estimating software programmes will automatically account for wastage, and wear and tear, in the estimate. The result? You’re not left out of pocket.
5. Cover your overheads
Outgoings such as leases, standing orders, office equipment and so on, should not be covered by your profit margin – that’s not its job! These costs are overheads which should be accounted for separately. Any estimating software worth its salt will add overheads to your job. Both EstimatorXpress or Take-off & Estimate Kit have this function.
6. Base your estimate on the prices you’ll pay in 6 months’ time, when you order
In the current climate, the building sector is a tough one to be in. Inflation is tracking at around 9% at the time of writing. This is another area where software has your back. You can use the software to calculate how much a project would cost if it started today – then use its inflation calculation tool to estimate how much it’s likely to cost in a few months when the job actually gets underway.
7. Add a healthy profit margin
Tell the software the percentage profit markup you want and it’ll add the profit markup to your quote. You should be aiming for between 20% and 30%. Good customers will pay the right price for a high standard of work. Any customer who haggles at the outset will also likely quibble the final payment, so beware!
What next?
You may choose to apply these suggestions to your own estimating method, whether that be a spreadsheet or other manual process. However, building estimating software offers the easiest solution and a shortcut to bigger profits.
Some of the stand-out products on the market are EstimatorXpress and Take-off & Estimate Kit. EstimatorXpress comes loaded with pre-populated quote templates – for extensions, garages, new builds as so on - which allow you to estimate a simple extension in under an hour. Take-off & Estimate Kit is the solution for building firms who often take-off clients’ plans. This clever kit enables you to trace the plan and the software gives you an estimate.
If you’d like to see some of the best products on the market, check out the free estimating software trials below: