Quoting is a vital part of running a successful construction business.
Get it right, and you’ll win work while making a decent profit. But get it wrong and you could be in trouble, either quoting too high and pricing yourself out, or perhaps worse, quoting too low and losing money on the job.
It’s a delicate balancing act, so how do you get it right?
There are three elements that combine to generate the price you quote:
- Labour – the cost of your time, and the time of your team
- Materials – the cost of the materials needed to do the job
- Profit – the amount of money you’d like to make after paying your labour and material costs
Working out the labour cost comes down to experience, as you need to estimate how many days, weeks or months are needed to complete the job. But remember, if you have five people working on the job every day from Monday to Friday, that is the equivalent of 25 days, not five. You’ll then multiply this by a daily rate.
Your daily rate needs enough markup to allow you to make a profit over and above what you pay your workforce.
When it comes to quoting for materials, your options range from writing things down on a piece of paper (or Excel-type spreadsheet) to using construction quoting software. Both are tried and trusted, but which one is right for you?
Paper-based quotes require you to think carefully about the project in minute detail, calculating in your head exactly what materials you need for every part of the job and the quantity of each. This requires time, skill, and experience, and may involve you physically measuring elements on-site or pouring over plans with a scale ruler.
You’ll then need to contact various suppliers to obtain their prices for the materials you need, which will probably require you to spend several hours on the phone, the internet, email or visiting stores.
Once you’ve got all your info together, you can type up your quote, or put it into a spreadsheet, showing the line-by-line costs of your materials and labour.
Although this is a process that’s been used for years, it’s slow and potentially inaccurate, and if your client changes their mind on any aspect of the build, or you realise you’ve missed something, you’ll need to re-think many of your calculations.
Construction Quoting Software
The more modern way of quoting is to use construction quoting software, which will help you produce professional quotes in less time. It contains tools that will give you a competitive edge, help you win more business, and free up your time so you can spend more of it with family and friends.
Instead of manually working everything out, it’s now possible to upload your plans to digital takeoff software and easily take measurements from the plans using the software’s tools. The software then uses the information from the plan to automatically create a list of the exact materials required.
Once you’re happy, the software then assigns costs to each item from its cost database, or it can connect directly with your preferred dealer for a live price list. So not only is the measuring and material list created automatically, but you no longer need to spend hours on the phone or online sourcing prices. Plus, if your client has a change of heart on any aspect, it’s quick and easy to make changes to your quote.
An example of this software is Buildxact. It does all of the above, and it also allows you to use templates from previous jobs so that if you’re quoting similar work, you’re not starting from scratch.
All in all, with construction quoting software like Buildxact, you can cut your quoting time by up to 80%. Giving you the time better spent on golfing, quoting new jobs, or relaxing with the family.