When construction business professionals are just starting out, by necessity a lot of things get done by guesstimate and gut feel. It’s the main way to learn what works and what doesn’t. But when your company is ready for significant growth, making data-driven decisions becomes crucial to success.
Where does that valuable data come from? It’s hiding in plain sight, right in your estimating records. Here’s how to find, analyze, and make the most of your estimating data.
The Estimating Data You Need for Informing Your Business Strategy
Creating a winning bid – and even determining which projects are worth bidding on – requires more detailed information the further upmarket you go. In order to make an accurate prediction on potential profits, you need a firm grasp on exactly how your team has performed on similar projects in the past, and you need to learn from past problems and successes.
The way to do that is through your data, such as the following.
Material Costs
A thorough understanding of the amount of supplies required for each type of job makes pricing work simpler and much more accurate. When you know you have a detailed history of material pricing, you’re better equipped to adjust future bids when experiencing price fluctuations.
Labor Rates
It can be tricky to identify exactly how much work your crew can do in a given timeframe, and during any individual job, there are often extenuating circumstances that change this capability – weather events, delayed shipments, crew illness, etc. But with the data from multiple projects at your fingertips, you can discover a solid average labor rate to estimate going forward.
Price & Profit per Key Unit
Having confidence in your selling price and net profit required per square foot, linear foot, acre, ton, or whatever your primary unit of measure depending on your trade, gives you an instant advantage when making bid decisions because you can quickly evaluate whether a job is worth it based on project size.
At-a-Glance Estimating Visibility
STACK’s Estimating Summary provides clarity on cost, overhead, markup, tax, and selling price for every type of project cost. With a click, you can drill down to summarized values and explore their underlying components and formulas.
Instant access to these key metrics allows you to gain confidence in your estimates. You’ll know that you can successfully execute bigger, more complex projects and go on to win that next big job.
Here’s a brief walkthrough of STACK’s Estimating Summary.
Key Unit
Use the Key Unit section to set your company’s normal unit of measure and input your acceptable ranges for selling price and profit per key unit. Then, for individual projects, enter your project size (usually found on the bid invitation). Pulling from your estimate information, you’ll see immediately whether the project falls within your range or not.
Project Markups, Profitability & Tax
These sections display pertinent estimate data at a glance so you can quickly identify where the costs and profits stand with each particular project. You’ll be able to determine where additional markup might be needed to reach your profit goals, as well as how taxes are affecting your selling price.
Proposal Data
When your estimate is final, you can save time by entering scope of work, terms and conditions, client information, and your company logo and details.
Accessing Essential Estimate Data
If you do back-of-the-napkin calculations or work from an old-fashioned desktop-based estimating software, you’ll be hard pressed to pull the data you need from past jobs and make it work for you. Digging through old information to compile everything in one place is time-consuming and probably not worth the rework.
Instead, consider switching to a cloud-based tool like STACK that will not only house all of your data but also display it in easy-to-use formats for quick inspection.
Because STACK is built in the cloud, it’s easy to export and share report data to Excel or to platforms such as your CRM or accounting solutions to create purchase orders or invoices, compare against another bid, or share with another part of your team.
Generate Detailed Reports
With estimating reports, you can pull over thirty different estimating-centric data points for each item, including:
– Item details like accounting code, name, description
– Takeoff data like takeoff name, unit, cost type, quantity, purchase unit, and associated assembly
– Cost, including wastage by quantity and percentage, adjusted quantity, unit cost, and measured quantity
– Markup and tax broken down by overhead amount, overhead percentage, line-item markup amount, line-item markup percentage, total markup, selling price, tax percentage, tax amount, and selling price with tax
– Any labels and project plans associated with the estimate line item
– Overall financial metrics including gross margin percentage, net profit amount, and net profit percentage
– For cost-centric reports, associated folder location of the item data (most frequently categorized by CSI)
Customize Reporting Structure
Having access to important data is crucial, but the ability to group and display it in the best way for your business is just as essential. With STACK’s enhanced custom grouping in reports, you can group your estimating data by your preferred work breakdown structure, like CSI.
Visualize the total scope of work and the relationship between work items more clearly with this flexible breakdown capability. You can leverage your data hierarchy to create consistency and simplicity across your entire project process, with the option to adjust folder structure to support the purchasing process or organize a report for accounting and third-party system exports.
Think outside the box and move beyond a CSI-based organization to categorize items by their vendor, effectively generating a master item list categorized by supplier. The sky is the limit!
Ready to see how you can make your estimating data work for you? Book a meeting to walk through STACK’s capabilities.
