You have the opportunity to bid on a great new project, but getting it wrong could be costly. After all, once you present your bid and your client accepts, you’re committed. How many times have you won the job — only to find out that you were substantially below any of the other bidders? Your first thought was probably “What mistake did we make in the bid?” It then likely turned to “How do we keep this job from becoming a disaster?”
If you’re in this situation and don’t know, you’re not alone. Accurate estimating and project tracking are challenging because many company leaders still use manual systems.
Take job change management, for example.
In some companies, customers might communicate changes to the foreman or forewoman on the job site, but he or she has to wait to return to the office at the end of the day to let the business manager know what the customer requested. The business manager then enters details of the change into the estimating system manually — but not until the next day. It may be one to two weeks before you can nail down a revised cost, and only then can you even submit the change order request.
Maintain accurate information from beginning to end
To ensure a job is profitable, business managers must juggle myriad details that are always in motion. According to Construction Business Owner magazine, construction company leaders must track accurate information at every stage of a job:
- Job estimate
- Job setup and start
- Job progress
- Job closeout and punch list cleaning
Job cost, according to the article, requires accurately tracking multiple components.
- Labor — one of the largest expenses and most easily underestimated, depending on the size of the job
- Materials — includes additional costs such as storage and interest
- Taxes and insurance — difficult to track if you don’t itemize
- Equipment — an oft-forgotten cost that should be factored into estimates
Along with all these details, contractors have to stay on top of job progress.
Often, there are significant penalties if a job isn’t on time, so if you fall behind, you stand to lose all of your profit margin just in paying penalties. The days of waiting for a week or two until your employees report all job time and costs in order to see the job status are over — daily updates are the trend.
With so much to track, why aren’t more companies automating?
Manual systems are deeply ingrained into many business leaders’ processes, and they feel that automation will be too difficult for their field workers. But an integrated software system that’s built to handle construction and contractor business details — but still provides ease of use — offers tremendous benefits.
There’s always that fear of “My job is changing,” but managers don’t realize how much more they could be doing if they improve job visibility and eliminate routine manual processes. It takes some time, realistically, to get a system up and running and get people really comfortable with using it. But within a few months, the company leaders see that employees are using time better; they’re more efficient. You can see your costs across an entire project, manage it better, respond to changes better, and protect your profit.
The right tools bring profit into focus.
So, could your company and employees benefit from an integrated management system? If you’d like to save time, make better business decisions, avoid unnecessary penalties, reduce risk, and have less stress about running the day-to-day operations, it’s worth looking into.
Ensuring every job is profitable doesn’t have to be as difficult as it has been in the past. You just need the right tools.