👉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And, the unit prices they use are often #outdated and inaccurate.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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