Contractors strive to improve their estimates on a daily basis. As a contractor, you can never be sure about your profit margin on a job. That’s because when you put an estimate together, you’re often working with figures that don’t give you an accurate picture of the costs. Even a small mistake when you input numbers can affect how much money you end up making on a job. Below, you will learn the best ways to avoid making mistakes that throw estimates out.
Choose Your Projects Carefully
Bidding for new work is an essential part of any business. Bids vary depending on the business. Many apply government contract bidding to their plans while others opt for other bids. Unfortunately, a decent amount of companies waste their time on estimates for jobs that they know aren’t right for their companies. This is a common mistake in the industry. Have the confidence to turn your back on contracts that you know won’t make you money.
If you’ve started working on a bid and see that numbers don’t work for you, cut your losses and don’t proceed. You may realize that the contract is too big for you to take on, or the scope is too small to make it profitable. Once you start interrogating the bid, you might discover you don’t have the construction skills or infrastructure to match the requirements. Don’t feel compelled to take on every proposal that comes your way.
It makes sense to look at your strengths and weaknesses and assess if you’re compatible with the project. Falling short of the expectations your client has, or making mistakes, can affect your reputation and other contracts.
Make Accurate Estimates
Preparing a takeoff is time-consuming and risky when you do it by hand. You’ve usually got a tight deadline to look through elaborate plans and come up with a quote. Some clients decide to apply for construction loans after meeting. Many times, such clients use their new funding to increase your work as a contractor. With all of these changes occurring, it’s understandable that you can forget to factor in certain numbers or make mistakes with the numbers in the takeoff.
Check your numbers at least twice and then ask someone else to double check them for you. Inaccuracies can come back to bite you and cut into your profit margin. As noted by https://groundplan.com, software designed to help you compile a takeoff eliminates these risks and ensures your quote is accurate. You can also work from PDF files instead of printed drawings to create the takeoff which speeds up the process too.
Factor In Site Details
It’s preferable to visit the site of a build before you start putting together your quote. You need to get a sense of the location and layout. You’ll want to gain an understanding of any logistical issues that may affect your pricing and therefore cut into your profits.
Unfortunately, it’s not always possible to do a site visit, in which case you’ll need to gather information from the client. You don’t want to miss out any details that could affect the accuracy of your bid. You can’t get the full context of a project when you’re working from drawings so relying on them for information is a risky strategy. To improve your tactics, apply the top construction bidding tips to your work.
Give Yourself Enough Time
Avoid rushing a bid to meet a tight deadline. You need to allow time to double check your work and make sure all the details are accurate. It’s a challenge to strike a balance between meeting a client’s expectations for an accurate quote and submitting a takeoff or estimate you know is correct. Estimating software reduces the time it takes to put together a bid so it can really help you when you need to turn around figures fast.
Don’t Ignore Risks
It’s challenging to account for all potential problems that might occur. But each issue, from health and safety hazards to financial risks, need to be considered to protect your business and profit. Instead of putting faith in the fact that they probably won’t happen, look at a project systematically. Weigh up the risks and how much it will cost to reduce them. Consider a contingency plan if a problem does crop up. Is it solvable? If not, you may need to walk away from the project.