👉The first goal of accurate estimating and bidding system.
🚧This is to insure you know and track job labor, equipment, material and subcontractor costs.
🤔Ask yourself these questions as you think about preparing your next bid:
• 📌Do you know and track job costs?
• 📌Do you recap final costs versus the estimate?
• 📌Do your field timecards reflect the real costs per work item?
• 📌Does your accounting system give timely job cost reports?
• 📌Will your estimate produce accurate costs?
• 📌Do you keep track of labor costs?
• 📌Do you have a cost history library?
• 📌Do you feel confident in your costs?
• 📌Are your general conditions costs accurate?
• 📌Is your labor burden rate correct?
• 📌Is your crew bidding rate accurate?
• 📌Are your equipment rates accurate?
• 📌Is your overhead markup sufficient to recover your overhead?
• 📌Is your profit markup enough to give you a proper return?
What's your estimator's No. 1 priority? When I speak at conferences or conventions, I get many responses to this question. They include the following:
• 📌Bid lots of jobs
• 📌Get lots of work
• 📌Maximize sub-bid coverage
• 📌Be competitive
• 📌Know what things cost
• 📌Make a profit
The #top_priority for my #estimator is to arrive at #accurate job costs.
I don't want our bid to be an estimate of what a job might cost, plus or minus 10 percent.
Estimating accuracy is a key to long-term construction business success.
The only variable on any bid should be the #profit mark-up. Excellent and experienced estimators know what things cost.
In my opinion, their estimating goal must be to prepare bid estimates within 1 or 2 percent of the final actual cost on every job. Good estimators continually compare their #past_bids to the final job cost results to see how accurate they were.
Then they make adjustments accordingly for their next bids. They are in constant contact with the field superintendents and foremen to review how they arrive at estimated costs.
✅They continually review labor, material, equipment, subcontractor and supplier costs to insure they know every possibility for differences in the jobs they bid.
✤┈┈┈┈┈••✦ ✦••┈┈┈┈┈✤
✨💫 @etconp ✨💫
🚧This is to insure you know and track job labor, equipment, material and subcontractor costs.
🤔Ask yourself these questions as you think about preparing your next bid:
• 📌Do you know and track job costs?
• 📌Do you recap final costs versus the estimate?
• 📌Do your field timecards reflect the real costs per work item?
• 📌Does your accounting system give timely job cost reports?
• 📌Will your estimate produce accurate costs?
• 📌Do you keep track of labor costs?
• 📌Do you have a cost history library?
• 📌Do you feel confident in your costs?
• 📌Are your general conditions costs accurate?
• 📌Is your labor burden rate correct?
• 📌Is your crew bidding rate accurate?
• 📌Are your equipment rates accurate?
• 📌Is your overhead markup sufficient to recover your overhead?
• 📌Is your profit markup enough to give you a proper return?
What's your estimator's No. 1 priority? When I speak at conferences or conventions, I get many responses to this question. They include the following:
• 📌Bid lots of jobs
• 📌Get lots of work
• 📌Maximize sub-bid coverage
• 📌Be competitive
• 📌Know what things cost
• 📌Make a profit
The #top_priority for my #estimator is to arrive at #accurate job costs.
I don't want our bid to be an estimate of what a job might cost, plus or minus 10 percent.
Estimating accuracy is a key to long-term construction business success.
The only variable on any bid should be the #profit mark-up. Excellent and experienced estimators know what things cost.
In my opinion, their estimating goal must be to prepare bid estimates within 1 or 2 percent of the final actual cost on every job. Good estimators continually compare their #past_bids to the final job cost results to see how accurate they were.
Then they make adjustments accordingly for their next bids. They are in constant contact with the field superintendents and foremen to review how they arrive at estimated costs.
✅They continually review labor, material, equipment, subcontractor and supplier costs to insure they know every possibility for differences in the jobs they bid.
✤┈┈┈┈┈••✦ ✦••┈┈┈┈┈✤
✨💫 @etconp ✨💫
❤8👍6😢1🙏1
👉Accurate Estimating
1. 📌Accurate Time Cards-Excellent estimators know accurate estimating starts with accurate information from the crews who actually do the work.
#Step_one is to insist your timecard is divided into the cost codes you want to estimate with. Then, it's the #estimator's responsibility to insure field workers are filling out timecards correctly.
2. 📌Accurate #Labor Burden Rate-Do you know how your labor burden rate is calculated? Is it accurate or an approximation of what your #accounting department thinks it should be? An accurate labor burden rate is essential for accurate estimating.
If your rate is padded, you are too expensive, and if it's not complete you'll bid too cheap. Review it for accuracy and include taxes, workers' compensation, medical, liability insurance, vacation, union dues, safety training, small tools, overtime and down-time.
3. 📌Accurate #Crew Bid Rate-Excellent estimators use different crew rates to bid different projects based on what the job needs.
A crew on a difficult job needs more experienced people, while a larger simple project can use less trained crew members. Figure different crew sizes and make-ups to determine your accurate man-hour crew bid rate.
I like to calculate #bid rates for two-, three-, five-, ten-, and twenty-men crews. You will find your bid rate varies considerably for different crews.
4. 📌Accurate #Equipment Rates-Excellent estimators know what equipment really costs. Calculate the cost for each piece of equipment your company uses.
✅Total the purchase price, interest, maintenance, gas and insurance over the life of the equipment. Divide this total cost by the expected number of billable hours to arrive at you accurate cost per hour.
5. 📌Accurate #General #Conditions-Most estimators either guess at the actual costs of job start-up, managing, supervising, temporary facilities and closing out projects, or they use a percentage to figure general conditions.
And, the unit prices they use are often #outdated and inaccurate. Most of the time general conditions can vary from month to month.
#Accurate estimating must include a review of what your #general_conditions really cost and then a budget based on input from the field.
6. 📌Accurate #Overhead-Your company overhead is a fixed (not a percentage) amount. Divide your total #projected_annual overhead by your total projected annual job costs (not sales volume).
This percentage will equal the actual overhead recovery markup to use.
Example: 800,000 Birr projected #annual_overhead divided by 5,000,000 Birr projected annual job costs equals 16 percent #markup for overhead recovery.
Don't get trapped into thinking you can use an industry average such as 10 percent or 15 percent to cover your overhead costs.
7. 📌Accurate #Profit MarkUp-Profit markup is 👉🏾not determined by what you can get.
It is a fixed amount of what you want. ❗️To determine the profit markup required to hit your goal, divide your total annual projected costs by your annual profit goal to determine markup.
🖍Example: 400,000 Birr annual profit goal divided by 5 million Birr projected annual job costs equals 8 percent markup to hit your profit goal.
If you can't achieve 8 percent profit markup in your market, your only solution is to adjust your volume up and your markup down until you hit your 400,000 Birr profit target.
✅Want to make lots of money? Make your bid more than a "guestimate." Make each estimate an exact prediction of what it will take to build every project.
Install accurate estimating systems and controls and watch your #bottom-line results improve significantly.
@etconp
1. 📌Accurate Time Cards-Excellent estimators know accurate estimating starts with accurate information from the crews who actually do the work.
#Step_one is to insist your timecard is divided into the cost codes you want to estimate with. Then, it's the #estimator's responsibility to insure field workers are filling out timecards correctly.
2. 📌Accurate #Labor Burden Rate-Do you know how your labor burden rate is calculated? Is it accurate or an approximation of what your #accounting department thinks it should be? An accurate labor burden rate is essential for accurate estimating.
If your rate is padded, you are too expensive, and if it's not complete you'll bid too cheap. Review it for accuracy and include taxes, workers' compensation, medical, liability insurance, vacation, union dues, safety training, small tools, overtime and down-time.
3. 📌Accurate #Crew Bid Rate-Excellent estimators use different crew rates to bid different projects based on what the job needs.
A crew on a difficult job needs more experienced people, while a larger simple project can use less trained crew members. Figure different crew sizes and make-ups to determine your accurate man-hour crew bid rate.
I like to calculate #bid rates for two-, three-, five-, ten-, and twenty-men crews. You will find your bid rate varies considerably for different crews.
4. 📌Accurate #Equipment Rates-Excellent estimators know what equipment really costs. Calculate the cost for each piece of equipment your company uses.
✅Total the purchase price, interest, maintenance, gas and insurance over the life of the equipment. Divide this total cost by the expected number of billable hours to arrive at you accurate cost per hour.
5. 📌Accurate #General #Conditions-Most estimators either guess at the actual costs of job start-up, managing, supervising, temporary facilities and closing out projects, or they use a percentage to figure general conditions.
And, the unit prices they use are often #outdated and inaccurate. Most of the time general conditions can vary from month to month.
#Accurate estimating must include a review of what your #general_conditions really cost and then a budget based on input from the field.
6. 📌Accurate #Overhead-Your company overhead is a fixed (not a percentage) amount. Divide your total #projected_annual overhead by your total projected annual job costs (not sales volume).
This percentage will equal the actual overhead recovery markup to use.
Example: 800,000 Birr projected #annual_overhead divided by 5,000,000 Birr projected annual job costs equals 16 percent #markup for overhead recovery.
Don't get trapped into thinking you can use an industry average such as 10 percent or 15 percent to cover your overhead costs.
7. 📌Accurate #Profit MarkUp-Profit markup is 👉🏾not determined by what you can get.
It is a fixed amount of what you want. ❗️To determine the profit markup required to hit your goal, divide your total annual projected costs by your annual profit goal to determine markup.
🖍Example: 400,000 Birr annual profit goal divided by 5 million Birr projected annual job costs equals 8 percent markup to hit your profit goal.
If you can't achieve 8 percent profit markup in your market, your only solution is to adjust your volume up and your markup down until you hit your 400,000 Birr profit target.
✅Want to make lots of money? Make your bid more than a "guestimate." Make each estimate an exact prediction of what it will take to build every project.
Install accurate estimating systems and controls and watch your #bottom-line results improve significantly.
@etconp
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