Bid More Competitively Without Sacrificing Profit Margins is defined by the equation:
Profit = (Market Opportunity Strategy) + (Protection Against Profit Erosion)
In this case, centered on utilizing the HeavyBid estimating and bidding software to maximize the efficiencies of any civil estimating department to achieve desired results from their estimating efforts. These results range from increasing the number of estimates produced without significantly increasing the cost of the estimating department to using estimating practices that put a company in the best position possible to maintain the projected profitability of the project from handoff to close out.
Market Opportunity Strategy refers to the decision making process that goes into deciding what is and is not a viable opportunity for any given company, and the process for successfully going after and securing those opportunities. Protection Against Profit Erosion refers to those steps taken during the estimating process that minimize or reduce the risk of profit erosion during the building phases of the project lifecycle.
Estimate & Strategic Data
Emphasis needs to be placed on the two primary types of data used. Estimate Data and Strategic Data. Estimate Data being the information both provided and developed that enable the capture of all necessary cost information which is then translated into cost data in the estimate. Typical to this would be any and all documentation and information provided by the prospective client. Developed data could be real life production information from field operations available to estimating for comparisons. Strategic data is the type of information that permits a construction company to make the best possible decisions relating to what to bid and how to bid it. This could be historical information that shows what types of jobs, which customers and what scopes of work result in the best profit results.
Protection Against Profit Erosion
Protection Against Profit Erosion takes into account all processes and activities that start in the estimating department and extend through the entire operations disciplines that prevent profit erosion resulting from performing field operations in a way that diverges so much from what the estimate anticipated as to incur costs over and above the budgeted amount. This ties back to the data conversation in the form of well thought out communication between estimating and the field prior to the commencement of construction, and continues all the way through the day to day functions and activities performed by field personnel to ensure that all care is taken to adhere to the estimated costs as much as humanly possible. Field production information must be timely in order to be useful. This type of data must be recorded on a daily basis and be reviewed immediately to ensure the data is accurate. If it’s not accurate, it is of no use in the future.
Examine Your Estimating Processes & Systems
Achieving the desired results often requires a renewed dedication to examining all estimating systems and processes. Going deep into all data to verify the greatest level of detailed information that is fitting to the needs of the particular company is solid and meaningful. And then finally putting that information to use in ways that allow the field operations to maximize the profitability of the work they perform.
To learn more about our construction bidding software to help you bid more competitively without sacrificing profit margin, visit our HeavyBid page.