Time and time again, business owners face the same question, “How can I make my company more efficient?” These days, if you’re not using technology to do so, it may be the prime differentiator between you and your competition and your company’s profitability.
One way remodeling businesses can be more efficient is by using estimation software to create work proposals. For those who are unfamiliar with this, the software programs help contractors develop project proposals and estimates to present to clients. As a member benefit, NARI is providing its members with an estimation program.
After the first meeting, an interested client will probably ask you to provide them with an estimate. By incorporating their needs, space specification, and material options, most contractors are able to give homeowners an accurate project estimate.
Before the use of computers, the average contractor would calculate bids by hand. Mike Hydeck, MCR, CKBR, owner of Hydeck Design Build Inc. and past president of NARI National, remembers the days when he would compute his own bids.
“I would write down all of the job specifications and determine how much material I needed to fill the space; then I would call the lumber yard for the pricing and multiply it by the amount,” Hydeck says. “It was very long and time-consuming.”
To ease this part of the process, NARI members have free access to Intelligent Estimate thanks to Andersen Windows & Doors.
Hydeck, a 25-year veteran of the remodeling industry, breaks down the benefits to using Intelligent Estimate.
Hydeck paid around $1,800 for the estimation software he uses, in addition to paying a fee for quarterly updates to ensure the accuracy of material costs. He ran an estimate on Intelligent Estimate that he had previously run on his software and found that the two quotes were within $500 of each other.
Intelligent Estimate has three columns for the price of materials. The first is the average cost of materials for all of the other building industry business owners in your local area. The second column reflects your price for materials and the third column accounts for additional costs that are dependent on the project type. (For example, if the project is labor intensive or requires a lot of detailing, that can be accounted for.) Users can choose from any of the three pricing columns to come to their final quote.
“It’s convenient to have different pricing models because every job is different, and there are details that need to be considered when you’re pricing a project,” Hydeck says. He also notes that it is helpful to get an idea of what competitors are charging so you can predict how your bid will stack up against others.
The software covers every aspect of the job, such as change orders, time sheets and different types of building materials.
The other advantage to using this software is it helps maintain your profit margin. “The program is completely customizable to work for you,” Hydeck says. “So if you like your profit margin to be at 25%, it is easy to consistently maintain that margin for every project.”
Once all of the information has been entered, users can choose what kind of proposal they would like to give to their clients. There are line item costs or total costs bids, or you can print out different estimates based on changes in materials or pricing models.
“The proposal can be imported into a Word document and is very neat and easy for homeowners unfamiliar with bids to comprehend the scope of work,” Hydeck says. He also adds that in Word, contractors can add their letter head or logo to the document.
As many know, it’s easy to make mistakes when it comes to mathematical equations. Using estimating software prevents these mistakes and can be completed in half the time.
“After using software for a while, you customize the program to fit your needs, and suddenly, what could have taken you a couple hours will take your 20 minutes to put together,” Hydeck says. For business owners who are juggling multiple clients at once, this type of software allows you to get accurate bids together in a short period of time and allows you to make changes as the project progresses.
For example, if there is a change order, most contractors need to tack on an additional fee and time period to get the new materials. Estimating software allows contractors to get the altered proposals to clients who are anxious to incorporate that additional fee into their budgets.
“It’s just another way to present yourself as a true professional to clients and make your company run more efficiently when things come up,” Hydeck says.
Intelligent Estimate is available for all NARI members at no cost and can be accessed on the Members Only section of the Web site. Because it is located online, members can access their account any time and anywhere.
“If your out on the field and you need to make a change or get a bid out to someone, you can stop by a coffee shop and take care of it, whereas my software program is on a disc and can only be accessed at my office if I don’t have it with me,” Hydeck says.
The online feature also allows the program to be updated daily and not quarterly like Hydeck’s. So you can be confident that your proposal is the most accurate according to material costs and your local area.
“The fact is, if you’re not already using software, this is the perfect way to start,” Hydeck says. “I will admit I was weary of using software at first, and now I wouldn’t create an estimate without it. I really cannot imagine being able to handle all of my clients without this type of technology.”—Morgan Zenner