How to Estimate Concrete Jobs?
Working concrete is hard, but estimating concrete jobs can be even harder. It’s a vital part of keeping your contracting business in the black, even though the process keeps you in the office, increasing your overhead. When you know that being in the field improves your profitability, it’s easy to get caught up in wondering where you should be – driving more sales or getting more work done. On top of that, there are some different approaches for estimating concrete jobs that may or may not work out well for your business. Some of them tie up a lot of time while others don’t take into account all the materials and labor that may be involved in the process. Here’s a quick look at the best factors to consider when estimating a concrete job that will help get you back in the office faster.
What’s the Best Way to Estimate Concrete Jobs?
Where are the bulk of your project leads coming from? When you have a decent marketing plan in place, you shouldn’t have to spend a lot of time tracing down potential projects for your company. You’ll still need to take a look at local industry resources, such as trade associations, talk to prospect who have contacted you through your marketing efforts or your networking, professional sites that list upcoming projects and even the occasional trade show. If you’re spending a lot of time putting up ads on Craigslist, hanging contact tags on community bulletin boards or similar high labor/low outcome options, especially after your company has been established, you’re working too hard and need to make your marketing options work for you.
Are you focusing on what you do best? There are many programs, including concrete estimating software, that provides you with analytics to figure out what type of projects are most profitable for your company. Are you a local-only contractor? A regional business specializing in commercial work? A multi-state concern that works only on LEED new construction houses? Whatever your main focus, you’ll be more profitable by staying within that specialty. If you do need to take on work outside your specialty, make sure you include a good margin to cover additional labor or specialized training to pull it off. If a project is significantly out of your area of expertise, give it a pass so that you won’t end up taking more than you can reasonably deal with.
Once you’ve found a job and make sure it’s a good fit, it’s time to figure out what will be needed for the project. Is it just a standard residential slab or does it have specialty aspects, such as significantly higher levels of reinforcement, new techniques you’re not familiar with or specialty concrete such as staining, air entraining, exposing aggregate or adding chemicals to retard or hasten set times? If it requires a longer set time or heat blankets in the winter to set, significantly higher than normal testing or will use a specialty truck or equipment to get the concrete in place, you’ll need to account for those prospective increases in materials, equipment and labor before finishing your bid.
Next, you’ll need to work through the takeoff. You could take a paper copy of the plans and mark it up while recording your anchors, rebar, mesh or custom forms you’ll need to pull off the job on a list or in a computer document. You’ll also need to calculate the amount of concrete needed and of what type. The problem with this situation is that it takes a lot of time. Even when you do the entire process on your computer, you’ll often need to switch between screens or windows to make your count, which may cause you to miss part of your count during the process. Dedicated takeoff software makes it much easier to complete a takeoff quickly and effectively.
After you’ve listed all your materials needed, you’ll need to get them priced so that you can calculate the materials total. You can do this by contacting your suppliers for a quote, but with the rapidly shifting cost of materials, this can become a serious burden on your time. Costing books can quickly lose their accuracy, and disc- or download-based pricing books require you to spend even more time updating them on a regular basis. If you miscalculate the materials, it can turn a profitable job into a financial nightmare for your business. High-quality cloud-based estimating software sometimes includes a cost database built into the process that not only automatically calculates your material costs, it is also updated automatically by the developer. Once this is done, you’ll need to calculate your labor. Make sure to consider how remote the site is, any additional incentives you’ll need to offer your crew to get a fast-track job done in a timely manner and similar issues that can eat into your profitability.
After you’ve come up with your materials and labor numbers, it’s time to figure your overhead and profit. Overhead consists of all your company’s expenses that you’d have regardless of whether you get the job or not. When your company has an office, administrative staff, marketing expenses, liability insurance, business licenses and other expenses not directly related to the project, that’s your overhead. You may want to determine what portion of your overhead to charge for a job based on how much the project will bring in as a percentage of your annual gross income. As an example, a $50,000 slab pour should cover 5% of your company’s overhead if your overall annual income is $1,000,000.
With these figures calculated, you can quickly put together your bid package with any required documentation. But instead of spending a lot of time in the office preparing bids, what if you could quickly and easily get it done in the field? Esticom makes estimating virtually effortless with a range of on-board tools. Try it free today.
As a former Director of Sales & Estimating, Chris Lee has over 10 years of experience building high performance sales and estimating teams focused on increasing revenue and profit by winning large commercial projects