What Do You Need From Your Estimating Software?
The latest in a series of tech talks for builders.
An old, seasoned estimator once told me that estimating was the most important job in the company. He then went on to say that all of a builder’s equipment, manpower and financial personnel guaranteed nothing unless there was work to be done — and that the work to be done had to be delivered by the estimating department.
You may or may not agree with his evaluation, but it does stand to reason that quality estimating is one of the keys to success in any construction-related company.
I’ve worked in the construction industry since I was 14 and, throughout my career, I’ve seen a lot changes and a lot of things stay the same.
Carpenters still cut lumber, but the handsaw has been replaced by a circular saw and now there are portable, compound miter saws everywhere. Would you give up the compound miter saw and go back to the handsaw? Probably not, but you could.
The basic building element in most houses is still the 2x4. Even though we are using more and more plastic and metal building materials, the basic structure of the house remains the same.
Estimating Is Still Estimating
So what do these analogies have to do with estimating? After all, estimating is still estimating. It is still all about dealing with the three “p”s of construction:
We still need to count or determine the quantity of the “stuff” (the parts and material) needed for the job. We still need to determine the “labor time” (the people) required for putting the “stuff” in place. And we still have to determine the “costs” for all the “stuff” and the “time” needed. Once we have our “cost” totals for the job, we just mark them up to get our “prices.”
But with the estimating process you follow today, can you go to the blueprints, take-off all of the dimensions and then associate those dimensions with the construction phases they apply to? Can you determine the costs for all of the parts and pieces that will go into the house? Once you compute the costs, can you then determine the price you need to sell the house for so you can keep building?
If you are in business, then the obvious answer is “yes” to all of those questions. Since you already know how to do take-offs that determine costs and help you compute prices, the next question is, is there a way to do it faster?
Computerizing the Process Increases Speed and Accuracy
Computerizing your estimating process will allow you to do everything that you now do by hand with more speed and accuracy. If you estimate well, you probably will be able to do even better with a computer helping you out. The better organized you are by hand, the better organized you will be with a computer.
So, now for the big question: “What estimating software should I buy?” Or, “What is the best estimating system out there?”
If I asked you what truck I should buy, you would probably reply with the name of your favorite auto manufacturer. That may or may not serve my needs.
Before I ask you for your recommendation about a truck, I need to determine what I want to do with that truck. I may be interested in towing capacity, and one truck may be better than another. The same goes for load capacity or even fuel economy. Then again, some people buy trucks for the way they look. Typically no one truck can do everything best, but it can do something the best. The same holds true for estimating systems.
What Software System Works For You Depends Upon How You Work
A significant number of builders completely subcontract their jobs. In that case, they need to collect estimates from trade contractors. Those builders don’t count studs or sheets of drywall, but they do know what the cost of the framing and the drywall will be from the trade contractors.
A builder who subcontracts every job doesn’t need the same estimating system as a builder who self-performs a significant number of the trades. You can use this premise to start evaluating types of software.
Will a stand-alone electronic spreadsheet work for you? Maybe. Do you need a full-blown, multi-faceted estimating system that can do everything from counting boxes of nails to fully integrating with an accounting package? The answer again is maybe. You will probably need something at either end or in the middle of that spectrum.
There are more than 30 well-documented estimating programs on the market today. One or more will probably do everything you need at a price you can afford.
Determine Your Needs Before Talking to a Vendor
The biggest problem I have found in the software purchasing cycle is that the buyer generally doesn’t know what his or her company needs. If you just collect prices from trade contractors, the system you need may revolve more around subcontract control than estimating.
If you self-perform most of your work, order all of the materials and pay for the labor directly, then you may need a system that can track multiple labor rates (and possibly different workers’ comp rates for different states) for given trades. You may need a system that can easily update prices on single items or related groups of items.
Once you understand what you need from estimating software, a vendor can show you how a certain product can help meet those needs. Don’t let the salesperson tell you what your needs are.
If you have a clear understanding of what you need from estimating software — and can explain these needs to a salesperson — you will get an easy-to-implement system that is a good fit for your estimating operations and your business.
Jim Girardi has a background in education, construction, telecommunications, software design and management and is vice president of sales for Builders CoPilot, a business management suite of software for home builders. Builders CoPilot is produced by iConnect Group. For more information, e-mail Girardi, or call him at 800-851-1966 x249.
Earlier Articles in This Series
- To read, “Know Your Technology Needs Before You Invest,” Part 1 of this series, click here.
- To read, “Strategic Planning Software Can Help Focus Your Business Model,” Part 2 of this series, click here.
- To read, “Does Your Planning Software Match Your Project's Sophistication?” Part 3 of this series, click here.
- To read, “Don't Put the CAD Before Your Product,” Part 4 of this series, click here.
- To read, “Manage Prospects and Buyers More Efficiently With Technology,” Part 5 of this series, click here.
- To read, "Automate Your Selection and Change Order Processes,” Part 6 of this series, click here.
- To read, “Scheduling Software Can Improve Your Cycle Time,” Part 7 of this series, click here.
- To read, "An Effective Purchase Order System Enhances Efficiency," Part 8 of this series, click here.
- To read, "Don’t Fix New Software If It Isn’t Broken," Part 9 of this series, click here.
- To read, "Beware Software Consultants Who Are Salespeople in Disguise," Part 10 of this series, click here.
- To read, "Eight Ways to Drive Internet Leads and Sales," Part 11 of this series, click here.
- To read, "Excessive Web Site Graphics Can Stunt Sales," Part 12 of this series, click here.
- To read, "Don’t Let Your Comfort Level Dictate Future Tech Changes ," Part 13 of this series, click here.
- To read, "Tech Talk: Process Integration Levels Your Playing Field," Part 14 of this series, click here.
- To read, "Tech Talk: The Time Is Right for Buying a Computer," Part 15 of this series, click here.
- To read, "Tech Talk: It Doesn't Hurt to Convert — If You're Prepared," Part 16 of this series, click here.
- To read, "Hack Attack — How to Protect Your Computer Network," Part 17 of this series, click here.
- To read, "Back Up Your Company Data — Before It's Too Late," Part 18 of this series, click here.
NAHB's Business Management Tools Offer Information About Using Technology in Your Business
For help using technology in your business, vist the Computer & Information Technology section of NAHB’s Business Management Tools (www.nahb.org/biztools) on the Members Only side of the NAHB Web site. Log on as a member for instant access to articles on building a Web site, using the Internet, automating your “paper” systems and much more.
NAHB Has More Than 170 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 170 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.
Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
Estimating Software Made Simple
EstimatorPRO™, available through BuilderBooks.com, helps you complete complex home building and remodeling estimates quickly and accurately. Its simple point-and-click design eliminates “guesstimates,” paperwork and common math errors. Designed specifically for home builders and remodelers, EstimatorPRO™ enables you to create estimating operations that are powerful and reliable enough for your most important management decisions. To view or purchase this software online, click here, or call 800-223-2665.
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