Estimates 101: Finding Success in the Competitive Construction Industry

The London construction industry faces more competition than ever before. While securing a lucrative contract is obviously important, part of this process of client engagement is centred around the ability to provide an accurate and thorough estimate. Unfortunately, this metric is often overlooked and the firm will instead focus upon the sales process alone. We should never forget than even after a client is interested, the estimate is the first real sign of professionalism and knowledge. Thus, it is critical that this portion of the project be approached in the best manner possible. What are a handful of the key factors which should be taken into account when estimating an upcoming job?

The Needs of the Client in Question

It is first necessary to understand the exact requirements of a potential customer. In London and other large cities, this is often first made clear through what are known as tenders. This information stipulates the parameters that a client will employ when choosing a firm. Variables such as price, time frames and delivery terms are often included. In simplest terms, this is the “bottom line” which the supplier should always adhere to. It is therefore wise to pay particular attention to this material before contacting the customer. Only after an effective in-house analysis of the feasibility of the proposal is performed should further contact be made. Still, it is prudent to inform the third party that the any tenders have been received in good order.

The Importance of Plans

It is said that any estimate begins with a good set of plans. The reason that this stage is so critical is that the customer needs to know whether or not their ideas will match the capabilities of the supplier. Normally, concepts will differ slightly. If this is not taken into consideration early on, massive problems can occur down the line. This step involves surveying the property, determining the initial cost and of course, making certain that the needs of the client can be met within the time frame that they wish. So, on-site consultations and other proactive communications are essential to provide the levels of clarity and insight which are necessary before the “concrete” plans take shape.

Avoiding “Stick” Estimates

Stick estimates are traditional means of listing the quantity of materials, the hours required during each phase of operation, the subcontractors and all items that are required. However, this can be time consuming and even confusing to the client. It is always better to opt for what is known as a unit-cost estimate. This is a much faster method and will keep the customer “in the loop” quicker than with a stick estimate. All lines (costs and factors) will be compiled into a unit cost. Then, the markup of the supplier is factored in. Finally, these numbers will be summarised and presented to the client. Of course, a further breakdown of these costs can be included as an addendum.

The Power of Technology

One of the most impressive advancements in terms of estimating a project comes in the form of CRM (customer relations management) software. This is an easy way to provide a clear proposal in a fraction of the time that would otherwise be necessary. By such a centralised form of communication, the buyer will quickly see what is proposed and the final price. He or she can thereafter compare this with their desires. Adjustments can be made if necessary and such a flexibility will give the supplier a competitive edge over “pen-and-paper” approaches.

Psychology

Besides these previous suggestions, it is important to remember that part of the ultimate approval process during any construction project revolves around the rapport between the client and the supplier. Any contract begins with a firm handshake and an understanding of the needs of both parties. In fact, this is still actually part of the overall sales process. If a representative appears aloof, rigid or distant, this can quickly torpedo what would have otherwise been a lucrative opportunity. Should the client feel attended to, he or she is much more likely to be receptive to the proposal.

Hidden Costs?

Although cost overruns are always a factor (especially in expensive locations such as London), there should be no hidden fees or obscure clauses. These can confuse the client and the estimate can quickly become muddled and unclear. All documentation should be concise and easy to understand. In this manner, the “fine print” is just as important as other listed metrics such as surveying, the quantity of materials and similar industry variables.

Successfully estimating any construction project require a good deal of experience and insight. Following these steps will enable any business to represent themselves with a sense of professionalism while the customer will feel at ease.