The importance of accurate estimates
Construction estimating can be tough, especially when dealing with many variables like inflation and material and labor shortages. Inaccurate estimates can cost you up to 80% more profit and can lead a project to take up to 33% longer than initially thought, according to the American Society of Professional Estimators. As a custom home builder, with a little investment and some training, you can avoid these problems using technology with advanced functionality to consistently complete accurate estimates. As you know, accurate estimates are important because overestimating a project can lead to losing the bid. Customers don't like surprises; so, approaching them after the project has started with a cost hike also is never good. You can avoid these scenarios with estimates that are always accurate from the start.
Many custom home builders and remodelers use estimating and material takeoff software to quantify the scope of work, materials’ price and the proper amount of labor needed to complete the job. These project components are the key to estimate accuracy, and modern software offers an easy-to-follow project plan that helps you consistently track them. This gives you the time to quickly and accurately estimate and bid more work, and more work boosts your profits.
The right software also saves you time in other ways. Compiling a materials list without up-to-date pricing can be tricky and time-consuming. It can take multiple trips to your pro dealer or phone calls to obtain the needed prices. You don’t need to waste time on back-and-forth conversations when you use software that has integrated dealer prices and inventory on its platform. There is no need to repetitively go over things like pricing, material inventory or other questions when you can directly access the pro dealer’s price lists, updated in real time whenever you need it.
Another benefit of takeoff software is that you can eliminate several steps from the takeoff and estimating process by using assemblies, which on average, can save 80% more time. For example, let’s say you need to calculate how many studs you’d need to order for your project’s walls. With software assemblies, all you need to know is the length of the walls, and the software calculates precisely how many studs are required to get the job done, saving you time and money.
You can also more accurately estimate just how long a project will take to complete. Modern software uses Gantt charts to help you simplify project planning by using one system for estimating and project management. For example, software tools let you schedule directly from your estimate or build reusable templates based on your typical schedules. You can then set reminders that the software automatically broadcasts via email or text message to ensure you let everyone know about important deadlines. You can look forward to having more free time and no more late nights spent emailing schedules and project updates. Also, with modern software, your online tools are always with you. You can access them anywhere to stay down the right path and remain productive.
Pricing the work
When you put together the estimate, you want to have accurate material pricing and know that the materials you need to complete the project will be available during the required time. You also want to make sure labor billing rates are high enough to accommodate employer-paid taxes, retirement funds, vacation time, sick time, etc. And it is always good practice to include an allowance for overhead costs like vehicles, insurance, cell phones, computers, and other administrative expenses. Of course, you want to include your profit percentage. Software can help you track all these figures, which you can then present within your final estimated price to the customer.
Bid with confidence with estimating software
Construction estimating software helps custom home builders produce estimates faster while maintaining the highest level of accuracy. Software like Buildxact offers you easy-to-use construction management tools that allow you to price more work while doing so efficiently and effectively.