Don’t be afraid to make money on every project
We believe the secret of a building firm’s success is not to be afraid to make a profit. There are so many variables during construction and we find more builders are pleased when they manage to meet their costs and pay employees, let alone make a profit. This isn’t something that should be an occasional welcome bonus; you should be expecting to make a profit on every job and have put safeguards in place in your estimate to ensure this.
As Simon Wild, Senior Estimator at the HBXL Estimating Service has observed, “builders can, quite often, correctly ‘wet finger’ guess the cost of a job. But it really is the ‘cost’. They forget they need to make some money on top. It’s not enough to just about break even.”
Be aware of hidden costs
On new builds only around 50% of a budget consists of construction costs, the other 50% is split between design fees, plot costs, finance costs and preliminaries. A lot of builders forget to account for these and thus find their profit eaten into throughout the project.
It is important all these significant secondary costs are taken into account. Site appraisal fees, site acquisition and the clearing of the land can all affect your budget and on new builds architects can take a fee of up to 15% of the total build cost.
Don’t do new builds? If you focus on smaller projects there are still tons of pitfalls you need to consider when producing a quote for your customer.
Having accurate projections is essential to keeping your work on time and profitable. Making money should be as big a factor in your budget as materials, labour costs and time; you are providing a service and should not feel guilty about profiting from this – every business does!
How to make a profit
The most important way to ensure you make a profit is to have an accurate estimate from the outset – something which is almost impossible to calculate manually. Independent research has shown that over 86% of spreadsheets* contain errors, making it impossible to get an accurate reading on your project. And don’t assume using the typical ‘going rate’ for a square metre/foot is going to be accurate – far from it. Every project brings it’s own peculiar problems from a request for non-standard materials to poor drainage, to name just two.
EstimatorXpress is a sure fire way to create a 100% accurate estimate and retain all your profit, whilst also impressing customers with your professional and detailed quotes. It takes into account everything, including all those small extras that it’s so easy to forget about such as wastage or wear and tear.
71.5% of customers believe they’ve made more profit since they started using EstimatorXpress. We want you to make money, which is exactly why Adrian Wild created the software and continues to lead the market today. It’s designed specifically for small to medium building firms and provides live material lists, profit forecasts and helps manage your cashflow issues. Even if your estimate comes in higher than your competitors, the quality of the quote and its breakdown helps justify the price of the job. Chances are the customer will be left thinking – what have the competitors left out!
Profit is part of a job – not a welcome bonus. Check out our guide for more hints and tips and discover how to ‘build profit into your projects with HBXL Building Software’.