Are you still wondering if you should buy estimating software? I know this seems like a silly question, especially with it being 2009 and all, but I consistently hear about (and from) many electrical contractors who are still not using software. Fortunately for them, this month’s column provides a listing of the many systems available.
Hopefully, the feature on page 58 and this column will convince you it is time to get serious about empowering your estimating department with some of today’s best software.
But we’re small
Good news! This is one area where size doesn’t matter, and there’s no better way to learn how to use estimating software than by estimating small projects. Additionally, service work orders and small change orders are excellent projects for estimating software. In fact, most of the software companies offer special versions of their systems specifically designed for small projects and/or service work.
In some ways, small companies benefit more from estimating software than larger companies. Small companies have fewer human resources (i.e., estimators), and software can significantly streamline estimating chores, freeing up time to get other work done. Another added value is how professional your estimates and pricing proposals will look when you associate them to the detailed output from your software. You will look like a big company and will be pricing work the way a big company does. Very impressive.
There also is a great case to be made for using estimating software to protect your company from construction claims and other pricing disputes. By being able to present clear, concise and highly organized materials’ pricing, labor-hour totals and other detailed costs data, a client questioning your pricing will have a harder time disputing and disproving it. This is especially critical if you ever have to enter arbitration or a higher court.
A word of caution: Don’t think small when buying a system. You need to plan for growth and the bigger jobs it will bring. You don’t want to find out too soon you didn’t get the right system for your growing firm.
But the stuff’s so darn expensive!
In today’s tough economic times, spending $2,500-plus on software may not be an option. On the surface, this is understandable. But digging deeper into it, you will find more reasons to spend the money rather than saving or spending it on other things. A good case could even be made for financing this software as it is a business expense and, therefore, a tax deduction.
If you are still estimating by hand and not using a technology that instantly allows you to extend your detailed takeoffs into any price breakdown or configuration you might need, you are probably spending more time than necessary pricing your work. It takes a lot of time to extend and check an extension by hand. It takes twice as much time to do this over again for another scenario or changes caused by an addendum.
You also are limiting your ability to compete. In today’s competitive bid market, you need complete control and the capability to immediately generate any special pricing breakdowns your clients may request or need.
Automated, paperless and it will make your lunch!
Well, you can’t believe everything you read and especially not what you are told by a commission-hungry salesman. But you will be impressed by the newer technology the software companies are offering. Several programs offer automated counting and on-screen takeoff features. I would highly recommend getting a thorough demonstration. But be prepared to learn you can’t do it all with one program; you may need two or three to get all the automated features you want.
Today’s programs do a lot more than just assist your estimating. Many are very helpful for project management, such as job costing and labor tracking. Are you able to compare your ongoing job costs to the estimate using a coded system? What does your accounting department think about this? I bet they would like the ability to automatically track job costs versus estimated costs in a few minutes rather than days.
The longer you wait to buy estimating software, the later you will be in learning a new system and creating databases needed to have a fully functioning and efficient operation in place. The longer you continue to estimate by hand, the less time you’ll have to run your projects.
So the question you need to ask isn’t “Can I afford this?” The question should be “Can I afford not to buy this?”
SHOOK is the president and chief estimator for his estimating company, TakeOff 16 Inc. He has worked in the electrical construction industry for more than 18 years. Reach him at 707.776.0800 and sfs@TakeOff16.com.