Profit disappearing? Get it back with EstimatorXpress.
Wednesday, February 08th, 2017
Making profit in construction made possible by EstimatorXpress.
Making profit in construction is something a lot of builders and developers fail to accomplish. For some, making profit isn’t even an aim. It is not uncommon for building firms to work on a basis of ‘getting by’. At HBXL we believe this is madness! Can you imagine any other type of business believing that making a profit wasn’t possible? But we understand making profit in construction or any industry for that matter isn’t easy. EstimatorXpress is our software solution to this construction conundrum.
To stand any chance of making some money you have to make sure your initial budget is as realistic and comprehensive as possible. Being able to drill down into the costs of a project allows you to have a complete picture of where your money is going and keep tabs on expenditure.
Analyse your costs – it’s worth it!
EstimatorXpress not only helps you build up the cost of the project but it also allows you to analyse all your costs in detail through its reporting tools. Never be caught out by the devil in the detail again. You’ll be amazed by the power of certainty that you have accounted for everything.
As well as properly calculating the physical build costs, it’s vital to allow for the hidden expenses. The legal fees, site surveys and stamp duty (if new build) not to mention local authority charges, insurance, site accommodation and security. These ALL have to be paid for from somewhere so you MUST include them in your budget in addition to the actual construction costs and of course, EstimatorXpress runs you through all of these.
One builder we know never allowed for site clearance, which was actually costing him several thousand £ 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 the knowledge that you’ll be paying for it out of your own pocket. Though we’d love it to, EstimatorXpress can’t predict when this may happen but it does allow for wear and tear on plant for example, and allows a small allowance per job for replacements so you don’t feel the sting as bad. Protect your bottom line and keep your hard earned money in your pocket.
Do you allow for wastage on your materials? Again EstimatorXpress helps you account for this by applying a wastage factor to every material in the project. Helping you account for costs as well as being less wasteful. This also helps when you are considering other ancillary items such as skips – if you can accurately predict your wastage you can estimate how many skips you need! The software is really rather clever, for example – if you are using reclaimed bricks on a project, EstimatorXpress allows a higher wastage factor for them.
For longer projects factors such as inflation can end up being a costly unseen consideration that can end up making a huge difference to the profit you walk away with. Using the EstimatorXpress inflation tool means you don’t have to worry what the future holds as you’ve done the smart thing and prepared for it.
Try out our inflation calculator to see how much profit you could be missing out on.
Accurate materials pricing
Live pricing makes sure that the material prices you are using to estimate are actually current and correct using HBXL’s Price Tracker™ or live merchant links. An inaccurate estimate is inevitable if you don’t have up to date prices, and if the price has gone up then guess who ends up taking on the cost. Accurate material prices is an obvious advantage in protecting your profit but not only this but it will save you time calling up merchants.
Average sq m – risky estimating
And who’s still using the sq ft or sq m average for pricing jobs? Take the lottery out of your quoting with EstimatorXpress. Cost per square foot rates can be misleading – chances are they don’t take into consideration problem sites, architectural details that are inherently expensive to build or your quality of specification. (If you do go down this route you need to carefully consider whether the “magic” square foot cost takes into account garaging, external works, NHBC fees and so on). We invite you to try it out against EstimatorXpress and see the difference. We do free trials and 1-2-1 demonstrations because we know you’ll be impressed.
Also make sure that you properly understand what the actual square footage of your build is. Does the square footage rule of thumb you use take into account the gross area of the house or the internal dimensions? This is crucial as it can make 10 to 11 % difference in your guesstimate. Why settle for this when you could have 100% accurate estimates every time!
Can you afford to drop your price?
Finally, are you properly prepared to agree a drop in price? Using the EstimatorXpress Profit Forecast report you can assess your bottom line accurately. For example, if a job has a profit forecast of £7500 gross, and you know that approx half of this pays for management and office costs – you know that a reduction of more than £3750 will mean a loss on the job. With solid ‘evidence’ in the report you can feel confident that a £1500 ish discount would be your max. Knowing your absolute base line and being able to clearly demonstrate the breakdown of the cost makes it easier to be strong in your negotiations. As well as, gives the client reassurance that you are offering them a fair price.
Choosing the right job
These points are something we have heard from our users time and time again. Take Charles OKell from UK Pro Build for example. Charles has told us how having HBXL software has allowed his company to make the right decisions on what jobs to take on. They can choose the right jobs based on certain factors such as most profitable based on cost, effort, time to complete etc. He attributes this to EstimatorXpress winning them more work and clearly laying out the specifications and requirements of each job.
UK Pro Build has since changed the area of work they specialise in to match the profitability of projects. Not only this but because of the accuracy and certainty EstimatorXpress gives, as well as its professional output, they can be bold on pricing to ensure a decent level of profit. Charles said “having the knowledge at our fingertips with material prices means we can be bold with our pricing strategy. This sends a clear statement to our customers that we know what we’re doing”. This level of assurance and professionalism is an unrivalled recipe for a successful bid for a project. This has been a consistent story from our users who are winning up to 230% more jobs having had EstimatorXpress. Charles went on to say; “because we know the software is totally accurate, it gives us the confidence to be forthright with prices. That’s the price, no negotiation!”.
Charles is one of our 12,000+ nationwide user base that are using software to help them win more business and crucially make more on every job. A simple combination of accounting for all the costs and potential costs. Getting it right from the start and being confident in the accuracy of your estimate allows for smart building firms to make profit on every project. It’s not rocket science. It’s straightforward and sensible.