Every Contractor tries to get the most out of his estimating department as it is the most critical pre-construction process. In this article, we’ll discuss the most common estimating problems the contractors are facing in 2023 and their solutions.
Common Estimating Problems in 2023
There are a few preconstruction processes every Contractor has to go through every time he plans to bid on a project. One of them is estimating the accurate project cost. It is crucial and most contractors face a few common problems during the estimating process.
Missing the deadlines
Every other contractor in the US faces a common problem. While working on other important tasks, they do not get enough time to keep up with bids and eventually, miss bid opportunities.
A contractor has a lot on his mind, like managing the workflow on job sites, optimizing labor productivity, meeting with builders and getting the finances ready. He hardly gets enough time to prepare an accurate brainstormed bid on time.
Missing deadlines mean missing bid opportunities.
Not being able to cope with time has become a nightmare for every contractor which halts their growth in the construction industry.
Infrequent Bid Submissions
Another major problem in estimating is infrequent bid submissions. If a contractor is busy enough to submit project bids once in a blue moon, it will greatly affect business growth. Every contractor has to go through a gestation period of 3-6 months. It means the time period between bid submission and bid to be awarded.
You have to keep on bidding while waiting for the builders to get back with bid results so you can have a steady discussion with a few builders all the time. You always want to have a few projects on your plate but with inactive estimating, it is difficult to generate a stable flow of awarded projects.
It eventually creates a burden on company finances because you have to generate enough revenue to bear expenses and prepare for construction-related activities.
Option #1: Estimating by hand
We discussed the problems the contractors face so we can now look into different ways we can optimize the estimating process.
The first option is to do the estimating yourself. It works well for a small contractor who wants to bid on 4-5 projects a month but it is not recommended if you are looking to grow your business.
Every person has to maintain a work-home balance and you cannot exceed your capacity to work. You need to take an adequate amount of rest to get optimal performance. A single individual cannot work on estimating, construction and all the other business management sides at the same time. That is why, working in a team is preferred.
Option #2: Hire an in-house estimating team
The second option is to hire a complete in-house estimator who is responsible for all types of estimating-related tasks and queries. There are a lot of good estimators out there whom you can contact through websites like Indeed and Zip Recruiter. The only downside in hiring an estimator is that they are one of the highest-paid people in the construction industry.
Consequently, it is a good option for big companies but hiring an in-house team is not advisable for small contractors. For an estimating department to be productive, you have to hire experienced estimators who expect a good salary package making the estimating even more expensive. It makes us think about the third and the best option.
Option #3: Outsource your Estimating to a Trusted Company
Huge companies like Turner, Clark, DPR Construction etc afford to hire experienced estimators paying them $75000 or so every year as they are already big enough to generate a good amount of volume to compensate for that. For smaller companies, paying that amount of money is not practical as they have to generate enough volume first to cover that price.
So what is the solution for that? Outsource your estimating to a reputed company.
This is actually the trump card for most of the contractors. If you find a good estimating team to outsource your estimating to, it will get the estimating done for you for a fraction of the cost making it more cost-efficient and even getting more work for you in the long run. Cost estimators like ourselves, save tons of money and time for you. While finalizing the estimate, we put an overhead estimating cost to cover it within the cost of the project.
Finally, outsourcing the estimating department helps you bid on a large number of projects, save money and eliminate the headache of managing an in-house estimating team. Eventually, the more you bid, the higher your chances of getting awarded.
If you are looking to grow your business, feel free to contact us. Share your project plans, we’ll review them and prepare a no-commitment quote for you.