Beyond estimating with spreadsheets
Perhaps you’re quite satisfied estimating building work using spreadsheets you’ve developed. But are your spreadsheets helping or hindering you when it comes to making decent profits? Are you at risk of getting left behind by the smart builders who are using 21st century methods to run their businesses? The builders who are accurately calculating their costs, managing their projects and making better profits using estimating software designed for building firms like yours? Here’s why you need to move beyond estimating with spreadsheets.
Avoiding errors
Starting with an accurate estimate of costs is key to ensuring you earn the profit you deserve for the quality of work you deliver. Unfortunately for those estimating using Excel or a similar programme, spreadsheets often contain errors. Fun fact: 88% of all spreadsheets contain mistakes, according to research by the University of Hawaii. I’m sure you can imagine how the errors creep in. Estimating with a spreadsheet involves typing figures into row after row, copying numbers from one cell to another, using formulas to work out areas, volumes and totals, linking cells to earlier build phases. A mistyped dimension or formula at this stage inevitably means money down the drain at a later point.
Covering ALL the job costs
The reality is that very few builders charge for everything. I’m talking about every last brick tie, every last screw. If you don’t account for every item in your estimate, you’re giving away your profit. This is where estimating software comes in. Award-winning EstimatorXpress, for example, contains pre-loaded job templates which contain calculations for all of the materials (and labour and plant) required for each task in the project. Using software such as this, it doesn’t matter if you’ve forgotten the brick ties. If you’ve chosen a wall specification with bricks, the software will automatically add the ties to your estimate. You don’t have to hold it all in your head!
Back to spreadsheets. Let’s say there are no mistakes in your estimate spreadsheet and you’ve remembered to include all the construction costs. You may still be losing money by failing to account for the costs which mount up in every project: an allowance for breakages, wear and tear on tools and theft - and also company overheads, VAT and profit. Whether you make a profit or not hinges on whether you account for these costs properly. Estimating software comes to the rescue once again. Software such as EstimatorXpress and Take-off & Estimate Kit by HBXL Building Software automatically add a wastage allowance onto every material, covering wear and tear and the inevitable bit of kit going walkies. These software solutions also prompt you to add a percentage mark-up for company overheads, VAT and profit.
Using the latest material prices
With inflation currently tracking at 9% in the UK – and construction cost inflation higher still – if you want to protect your profits, you must quote with the latest prices. If you plan to continue estimating with a spreadsheet, that means investing hours of your time, ringing around merchants or trawling the internet for latest prices, every time you estimate. If you decide to upgrade to estimating with purpose-made estimating software on the other hand, you’ll be able to download up-to-date material prices directly into your estimate, at the click of a button. Quality estimating software providers review their material prices at least once a quarter, if not more frequently, so you don’t have to!
Getting ahead of inflation
That’s not the end of the story when it comes to pricing correctly. Inflation is an ongoing challenge. The materials, labour and plant you need to purchase or hire for a project will, in all likelihood, be more expensive in a few months’ time when the job gets underway. Indeed, the prices will continue to rise until completion of the job. If you estimate a job starting in six months with today’s prices, you risk losing thousands of pounds on the job. If you choose to use estimating software like EstimatorXpress, you’ll benefit from built-in inflation calculators which automatically estimate how much prices will increase by, between now and the date you order the resources. This means your quote reflects the true cost of the project and you won’t be left covering any price increases.
Keeping your projects on a tight rein
Protecting your profit doesn’t stop there though. Managing the project effectively, ensuring the right resources are on site when you need them and avoiding hold-ups is crucial to holding onto your profits. Many estimating software solutions feature project management tools to help keep your projects on track. An automatic build programme, such as those generated by EstimatorXpress and BuildingWorks off the back of your estimate, will help ensure you always have the right teams on site, with the materials and plant they need, on the right day.
EstimatorXpress and BuildingWorks also produce a range of reports, from material and plant lists, to help you negotiate the best prices, to cashflow projection reports, to help you set up payment schedules with the client. With all this data at your fingertips, you’ll run a tight ship and heftier profits will be coming your way.
What next? Make more money…
If you’re hoping to move your business forward, simplify your admin and make bigger profits, perhaps it’s time to think about moving on from spreadsheets. Plan for your company’s future financial success and look into estimating software today.