If you’re in the contracting business, you know it’s important to improve your bottom line on each project so you can maintain a good reputation with your clients. This isn’t always easy, but you can improve your productivity using estimates.
Estimates are an excellent tool for specialty contractors, and with a top-notch project management software like Crows Nest, you can make accurate estimates without breaking a sweat.
How Estimates can Help Improve the Bottom Line
Having accurate estimates is essential because it can help you improve your productivity in contracting projects. You’ll have a solution for your project operations using correct estimates with the Crows Nest software. Here are some of the ways you can benefit:
1. Completion Date
As you use our software to determine the scope of the project, you can give a clear picture of when you think you can complete it. This can help you set a timeline, with details on when you can start and how soon you can finish. As you set the timeline, you can also determine how long it’ll take to gather the materials and labor force necessary to handle the project.
With an estimated completion date, you can start making a work schedule and weekly goals for your staff. This will help ensure you complete the project on time and meet your clients’ expectations.
An estimate can also help you come up with an accurate budget for the project at hand. Again, it’ll be crucial to inform the client of how much the project seems it might cost. While estimates aren’t entirely accurate, they can help your client prepare financially to deal with the overall cost of the materials, labor, and equipment required.
Estimates can explain how much money is needed for specific tasks so you don’t experience any cashflow deficits. At the same time, it’ll prevent scenarios where you overbuy some materials, leading to waste when the project is completed.
3. Work Allocation
It’ll be easier to allocate work to your staff when you have a software solution like Crows Nest. This is because you can customize the labor operations for the project as you see fit. For example, you can group your workers to handle various tasks and allocate the necessary materials to fulfill their responsibilities. Plus, you can make any modifications you want as the project proceeds to ensure you meet your goals in as little time as possible.
With each of your employees aware of the tasks they’ll be handling, the project timeline is solidly defined. As such, there’s no need to worry about allocating resources when you have our top-notch project management system because everyone will know what they’re supposed to do and when they’re supposed to do it.
4. Manage Client Expectations
When you provide an accurate estimate to your client, they can confirm whether you are within the scope of their expectations. This transparency can prevent scenarios where you could otherwise complete a project only to realize it didn’t meet your client’s requirements. In otherwords, it behooves you to ensure you have an accurate estimate of what the client wants from you from the very beginning.
Essential Components of Proper Estimates
You’ll want to keep in mind some specifics when assembling an accurate estimate for your clients. These elements include:
1. Required Materials
Whether you are handling a residential, commercial, or industrial project, each environment will require a specific selection of materials. So, the first thing to consider is the materials you’ll require for the project you are undertaking. Next, you’ll need to determine the inventory availability in the project location.
Once you’ve found materials that meet the contract specifications of the work you are hired to do, the next thing to do is determine the number of materials you’ll need.
2. Quantity of Materials
You want to be as accurate as possible as you assemble your estimate. This will require you to know the specific quantities the construction materials should come in. You don’t want to overbuy or underbuy materials since this will cause further inconvenience in the future and could also discredit your reputation as a contractor.
Keep a detailed inventory list to ensure you allocate the resources as accurately as possible.
3. Pricing of Materials
Next, you’ll want to know how much the materials will cost—both from a wholesale perspective, as well as a retail mindframe. This means you’ll have to scour the market for the most affordable pricing to ensure you help your clients cut costs. Once you have a database where you can reference prices and reputable vendors, this task will get easier.
4. Labor Costs
You should have a clear picture of the labor requirements the project has. You’ll need to determine the labor units for the work to be done and determine how much it’ll cost to hire the direct and indirect laborers. Direct laborers are those involved with installing the materials, while indirect laborers include supervisors, design engineers, and project managers.
5. Necessary Tools and Equipment
It’s also crucial to include the equipment, consumables, and tools you’ll require to pull off the project. So, you’ll want to consider mentioning the lifts, trenching machines, or generators you need. If you already have these tools and equipment, it won’t cost you a lot to use them in the project. In addition, you can rent these items if you don’t own them to avoid the cost of purchasing them.
Consumables are the items like electrical tape, rags, bandsaw lades etc., which tend to be hard to quantify. However, since it’s hard to price these items, you can use a percentage of the total material cost to include them in the budget.
As you look for ways to improve your bottom line for various projects, estimates are one of the best tools to use. Every specialty contractor should have software for creating accurate project estimates since this can help streamline executing the construction tasks. Crows Nest offers one of the best project software systems to help you create accurate and functional estimates.