How did your sales, marketing, and estimating fair in 2016?
- It’s year end review time
- Let’s review our performance for 2016
- Did we accomplish what we wanted to?
- What’s in store for 2017
- Take a look back at 2016
- Did you have goals set for the year? Did you reach them?
- Did you win enough work?
- Did you generate the necessary leads?
- Where are you headed in 2017
- What are your new goals for 2017?
- What is your target revenue?
- What are the necessary targets to reach that goal?
Create systems to organize your estimating and avoid errors.
- Estimating is a complex effort and it’s easy to miss some details
- There are many aspects to every estimate
- Contract
- General Requirements
- Project Management
- Work Scope/Tasks
- Closeout & Warranty
- We can miss things and scope gaps erode profits
- Create a system to help avoid omissions
- Guides and templates help cover the details
- Many of you already use templates – add guides to help the process
- A guide will help the estimator check on common issues / costs
- Break your guide into parts as outlined above
- Create the estimating playbook
- A series of guides and templates to help the estimator check the details
- The guides can be a simple as a series of questions and checklists
- Create one for each group and individual ones for each scope/task section
- Examples:
- Contract: what are pay terms? Schedule? Insurance? Bonds?
- General Requirements: Trash removal? Testing? LEED? Reporting? Software?
- Project Management: Onsite Staffing? Temp Facilities? Oversight?
- Work Scope/Tasks: Create a guide for each scope with questions related to the scope – Concrete Mix Design? Winter Protection?
- Closeout / Warranty: Special closeout requirements? Warranty? Warranty bond?
Review your quotes before submitting your proposal.
- Part of our estimate includes quotes
- Supplier quotes
- Subcontractor quotes
- Equipment quotes
- During estimating we reach out to vendors for quotes
- We typically provide them with the information
- Some review that information and some don’t
- They provide us quotes and sometimes for the wrong thing
- Protect you estimate by qualifying your quotes
- Qualify each quote you plan to plug into the estimate
- Call the vendor to review and ask questions
- Have them revise and quote what is correct
Accurate estimates help us win the best work.
- We want to bid less and win more
- Bid to the right clients
- Bid on the right projects
- Create accurate estimates
- Good estimates start with accurate take-offs
- We need accurate quantities for good estimates
- We need to capture all the proper materials
- Include the full scope
- Including overhead items
- Next be sure to get full pricing on everything
- Get quotes on all the materials
- Request prices from all subcontractors
- Be sure to review and clarify all quotes
- Ask for scope/quote sheets ahead of bid day to have time to review
Bid strategically to win more work.
- What’s your bidding approach?
- Bid a lot of jobs in hopes to win some
- Bid strategic jobs knowing you will win
- The best approach is to bid less
- Bid fewer jobs so you can win more of your bids
- In racing they say slow down to go faster – the same applies here
- If you bid too many projects at a time then the numbers are not accurate
- You often win when you make a mistake
- Take your time and bid fewer projects to have more accurate estimates
- Start winning more of your bids
- Bid on the right projects with the right clients
- Invest the time in each estimate to be accurate and realistic
- Be strategic about what bids you entertain
Landing the wrong project can destroy a good business.
- Not all work is equal
- Different project types, sizes, locations, etc.
- Different Owners, clients, managers, financing, etc.
- Different requirements placed on the contractors
- Determine what is best for you
- Start with your vision – what types of projects support it
- How do you want your business to run
- What are the skill sets you have now and in the future
- Use the Go / No-Go process
- Create your ideal project and create a score
- Score each potential project should be scored and compared to the ideal
- Use this scoring to determine which projects / clients you should chase
- Don’t be afraid to walk away
Review your contracts with estimating to clarify the scopes.
- Most estimates have them
- Clarifications to the bid
- Exclusions and inclusions
- Discussion items in negotiations
- Problems arise if not in contract
- Often happens when the project is on-going
- The project team is expected to perform per contract but contract is wrong
- Items are missed in the scope and now there is a cost gap
- Establish procedures to protect yourself
- Contract review procedures with estimating involved
- Check the proposal versus the contract and construction documents
- If there are questions or interpretations get them clarified
Dropping prices to win over a new client can be a good strategy.
- Buying a job is a common strategy
- We target a client and give them a low price in order to start a relationship
- We get in with them in hopes of future work at our normal pricing
- Does it really work?
- My successes and failures
- A developer – we did a job at their typical pricing in hopes of showing them they should pay us more – it worked
- An industrial plant – took a low price job in order to get in and later found that everything was based on lowest price regardless of value provided
- A city – took a project to get in and put the wrong team in place, didn’t provide value – never got shortlisted again
- This strategy can work but takes some careful research and understanding
- Know the customer – are they right for you?
- Know the projects – does value matter over price?
- Make sure you have value to add – if not they will never pay more for your services on the next project
- This is the key part – you must be bale to prove the values you offer in order to get the pricing you want in the future