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February 3, 2022
As a builder how do you manage every increasing costs and still not lose money?
Meet Sam, the builder who came to us for advice when he did not have any clarity what’s going on each project in terms of profitability.
Issue
> Struggle with estimation – Do not know how accurately prepare the estimation
> No proper data records to check the accuracy of estimation.
> Problem with how to analyze the deviations with actual data.
Impact
Underestimation of loss means the following impacts
> Loss of reputation and credibility trying to recover costs for under quoted estimates.
>Financial Loss on underquoting
Personally for Sam
>He was was nervous and in doubt whether his costs calculations are correct.
> He was unable to identify which job is profitable and which job will make him a loss
Objection
> There was a lack of understanding on how to use the proper tools to do estimation process as well as to analyze the variance with the actual data.
What services we provided
> We can provide the solution for Sam’s problem of getting organized in the doing the estimation process and to check the variance with actuals by setting up estimation tools.
Results
By setting up estimation tools, the following were achieved
>Accuracy of estimations increase
> It will help to quote faster.
>Once we prepare the estimate, we can keep it for future projects.
>Provides more critical data for future planning.
Realisations
Sam realized that using proper estimation tools helped him to save close to 5% project margins. For 500K house that’s 25K.
Happy to discuss in detail if you need clarity in your construction projects. if you build 10 houses that could mean extra 250K in bank.
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