How builders can make more profit through better estimating
Sunday, June 16th, 2024
Making a profit in building and construction is something many builders around the UK struggle to achieve. For some, turning a profit isn’t even a primary goal. It’s not uncommon for building firms to operate on a “just getting by” basis. At HBXL, we believe this approach is madness! Can you imagine any other business thinking that making a profit wasn’t feasible? But we understand that making a profit in construction, or any industry for that matter, isn’t easy. That’s why we created EstimatorXpress – our software solution to this construction conundrum.
Accurate Budgeting: The First Step to making a Profit
To have any chance of making money, your initial budget must be as realistic and comprehensive as possible. By drilling down into the costs of a project, you gain a complete picture of where your money is going and can keep tabs on expenditure.
Analyse Your Costs – It’s Worth It!
EstimatorXpress not only helps you build up the cost of a project, but it also allows you to analyse all your costs in detail through its reporting tools. Never be caught out by hidden expenses again. You’ll be amazed by the confidence you gain from knowing you’ve accounted for everything.
Forgotten Costs
In addition to calculating physical build costs, it’s vital to account for hidden expenses such as legal fees, site surveys, and stamp duty (if it’s a new build). Don’t forget local authority charges, insurance, site accommodation, and security. These ALL need to be included in your budget, and EstimatorXpress guides you through every step.
One builder we know never allowed for site clearance, which was costing him several thousand pounds on every project – the software reminded him of this, and he now quotes his customers for it. Obvious? Not always.
Wear and Tear
Being set back by a broken mixer is only made worse by knowing you’ll be paying for it out of your own pocket. While EstimatorXpress can’t predict when this may happen, it does allow for wear and tear on plant equipment and includes a small allowance per job for replacements. Protect your bottom line and keep your hard-earned money in your pocket.
Wastage
Do you account for wastage on your materials? EstimatorXpress helps you by applying a wastage factor to every material in the project. This not only helps you account for costs but also encourages less waste. Accurate predictions of wastage can also help you estimate how many skips you’ll need! The software is really rather clever – for example, if you’re using reclaimed bricks on a project, EstimatorXpress allows a higher wastage factor for them.
Inflation
For longer projects, inflation can become a costly, unseen factor that significantly impacts your profit. Using the EstimatorXpress inflation tool means you can prepare for future cost increases and safeguard your profits.
Try our inflation calculator to see how much profit you could be missing out on.
Accurate Materials Pricing
Live pricing ensures that the material prices you use to estimate are current and correct, thanks to HBXL’s Price Tracker+™. Inaccurate estimates are inevitable without up-to-date prices, and if the price has increased, guess who ends up covering the cost. Accurate material prices not only protect your profit but also save you time calling up merchants.
Average Sq M – Risky Estimating
Are you still using the square foot or square metre average for pricing jobs? Take the guesswork out of your quoting with EstimatorXpress. Cost per square foot rates can be misleading – they often don’t account for problem sites, expensive architectural details, or the quality of your specifications. Compare this method with EstimatorXpress and see the difference. We offer free trials because we know you’ll be impressed.
Also, ensure you understand the actual square footage of your build. Does your square footage rule of thumb consider the gross area of the house or just the internal dimensions? This is crucial as it can make a 10 to 11% difference in your estimate. Why settle for a rough guess when you could have 100% accurate estimates every time?
Can You Afford to Drop Your Price?
Are you prepared to agree to a price drop? Using the EstimatorXpress Profit Forecast report, you can accurately assess your bottom line. For example, if a job has a profit forecast of £7,500 gross, and you know that approximately half of this pays for management and office costs, a reduction of more than £3,750 will mean a loss on the job. With solid evidence from the report, you can confidently negotiate a discount, knowing your absolute base line.
Choosing the Right Job
These points are echoed by our users time and time again. Take Charles OKell from UK Pro Build, for example. Charles tells us that HBXL software has allowed his company to make informed decisions on which jobs to take on. They choose jobs based on factors such as profitability, effort required, and time to complete. He attributes EstimatorXpress to winning more work and clearly laying out job specifications and requirements.
UK Pro Build has since shifted its focus to more profitable projects. The accuracy and certainty provided by EstimatorXpress, along with its professional output, enable them to be bold in their pricing to ensure a decent profit margin. Charles says, “Having material prices at our fingertips means we can be bold with our pricing strategy, sending a clear message to our customers that we know what we’re doing.” This assurance and professionalism are key to successful project bids. Many of our users report winning up to 230% more jobs with EstimatorXpress. Charles adds, “The software’s accuracy gives us the confidence to be firm on prices. That’s the price, no negotiation!”
Charles is one of over 12,000 users nationwide using our software to win more business and, crucially, make more profit on every job. It’s a simple combination of accounting for all costs, getting it right from the start, and being confident in the accuracy of your estimate. It’s not rocket science – it’s straightforward and sensible.
To try out EstimatorXpress for yourself, why not request a trial or give us a call on 0117 916 7898.
