Estimating electrical projects requires expensive resources. This involves the costs of software, proper training, and salaries. The project selection process requires time from upper management to be sure the best projects are being bid.
Leaving time on the table may be as important, if not more important, than leaving money on the table. Leaving money on the table means you may not be getting fair value for your work. One of the best ways to alleviate this problem is to STOP competing on price. Chasing a competitor’s price can be detrimental. On bid day, you must follow solid bidding principles; if not, you may win a project that you’ll regret you did.
Time is either used wisely or unwisely. Wasted time can never be recovered. Following are some ways that estimating departments and estimators leave time on the table.
- Not having an estimating sequence – Having a step-by-step order of the estimating process keeps the momentum going forward and prevents regression. This sequence should be arranged by the following headings: 1) estimate preparation, 2) the takeoff, and 3) the extension. Having a sequence will prevent errors/omissions and save time.
- Bidding the wrong projects – Every contractor has a market or sector in which they perform better than others. A project’s complexity may require a top-notch foreman and project manager. If you don’t have the qualified personnel to execute a project properly, it might be best not to bid. The wise contractor will track historical data of successful bids. The adage “stay in your lane” applies here.
- Using untrained employees – Just because an employee is “eligible” to be an estimator, doesn’t make them “qualified” for the position. Being an electrician and an estimator are two different positions, and each requires proper training. Successful contracting begins with successful estimating. Quality estimates are typically prepared by quality estimators.
- Writing takeoff quantities on drawings and/or takeoff sheets – There is no value in writing device or fixture quantities on the drawings. This adds time to the process. These handwritten counts must be tabulated and entered into an estimating software program or written on pricing sheets. This becomes a breeding ground for errors and mistakes. There are several on-screen takeoff programs available to simplify this part of estimating.
- Not using quality estimating software – Estimating with pencil and paper is outdated and inefficient. It wastes valuable time. There is a myth in estimating that all estimating software does the same thing. This is not true. The wise contractor will choose software that provides the best efficiencies and best outcomes.
- Estimators not proficient in using estimating software – Many times, employees are left to themselves to figure out how to use the software. Most programs are not complicated, just complex. This complexity is best learned through proper training rather than “trial and error.”
- Failure to provide company standard reports for all employees – Standard reports create consistency and save time. Uniform standard companywide reports will prove the best outcome. Most software programs allow the user to create and share reports. Failure to provide these will require each estimator to create their own reports.
- Failed “in-house” training – Typically when estimators convey to me that they had in-house training, this means that a seasoned estimator shared a few tips and tricks related to estimating. Proper training will require a qualified instructor, a curriculum, and a scope/sequence. Most contractors have employees with varying levels of knowledge and experience. Very few in-house training programs properly address these challenges.
- Project turnover failure – The estimator must have project management in view to prepare for the bid. The estimate must be organized by bid item, system, area, and building to provide project management with the necessary reports for executing the project profitably. The goal of project management is to have the right materials, labor, tools, and information at the right place at the right time. Proper detailed and organized material lists and labor reports are necessary for efficient project management.
Working late and long hours are not a badge of honor due to poor company structure and bad processes. Accomplishing more in less time should be your goal. No employee deserves praise for doing seven hours of work in 12 hours. The goal should be to provide estimators with the necessary tools, training, and organizational structure that allow them to do 12 hours of work in seven hours.
Organization and establishing non-negotiable guidelines that provide efficiency are vital to stop leaving time on the table. Increasing estimating productivity and efficiency by 25% to 40% will provide considerable savings. However, the real prize in increased efficiency is increased bid volume. See the Table below to determine the ROI in increased efficiency and stop leaving time on the table.
Estimating departments should be well organized to provide maximum efficiency and production. Estimating time is too expensive (and too valuable) to waste. Using the best software, bidding on the best projects, and providing the best organizational structure with properly trained estimators will allow you to stop leaving time on the table.
Remember, you can always make another dollar; you can never make another minute.
Don Kiper is an independent electrical estimating trainer and consultant based in Niagara Falls, N.Y. He can be reached at [email protected].