From Accounting to Bidding – Nailing It!

When you’re in the construction contracting business a lot rests on your ability to present an accurate bid.

Before you bid your next job consider how your financial records and reports can and should strengthen your bidding accuracy.

It isn’t about the luck of the draw, nor is it about hoping you get close. It is about knowing and understanding the basic numbers (i.e. how much the materials cost, how many people it will take, how many hours will be involved) as well as a slew of other numbers which must be considered.

Taking a holistic look at the numbers

Of course, numbers in and of themselves are useless; it is when you apply your understanding of the construction industry, add your knowledge of your team’s competency levels, and take into account the likelihood of Murphey’s Law plopping itself down in the middle of your job site that you begin to have a clear understanding of how to shape your bid. Still, your financial reports are your friends, you’ll do well to listen to them. Here are some of the things they can tell you:

  • The labor and labor burden rate for each of your field employees

 

  • What your equipment costs you to own annually

 

  • Your overhead percentages per job

 

  • Your cost of sales

 

  • Your gross profit

 

  • Your net profits

 

  • Your gross margin percentage

 

  • What your liabilities and debt are

Some further information your reports will divulge

  • How your fixed costs are affecting your bottom line

 

  • How well each department or division is doing

 

  • How your sales are affected seasonally

 

  • Your past history concerning number of hours needed to complete tasks or portions of projects

 

  • Which subcontractors have proven most beneficial to you on previous jobs

What’s the point?

When you use your financial records in your bid preparation you have an historical guide as well as an up to the minute guide to assist you through the process. Plus, knowing your numbers puts you well ahead of the “average” construction contractor.

Know your contract numbers. Listen to your financial reports. Top construction business owners know their contract numbers because they listen to their financial reports.

There’s an app for that

And as for bidding, of course, there’s an app for that! Well, there are quite a few apps for that. Yet, there is one which we highly recommend and use with our clients, because of its many features as well as its ease of use. “Use Knowify’s powerful budgeting tools to create detailed materials/labor/subs breakdowns for each phase of the job, then translate your budgets into a bid in no time. Fully customizable bid templates. Syncs with QuickBooks Online.”

Additional Knowify features

  • Quickly create cost estimates or bids, and use progress or AIA billing to invoice your clients

 

  • Never re-enter the same information again. Create service templates, build a catalog, and waste no time in getting your bid to the client

 

  • Accurately track POs, expenses and revenue per job

 

  • Manage multiple jobs simultaneously

 

  • Put an end to re-entering data with Knowify’s QuickBooks 2-way synching

 

  • Quickly email bids and invoices to your clients, or POs to your vendors

Do you need help making heads or tails of how your financial reports can make a difference to your construction contracting business? Want to know more about Knowify?

Schulte and Schulte can help! 480-442-4032 or Toll Free: 866-629-7735

Getting Your Construction Company Ready for Company

You know the story. Company’s coming – we need to get this place straightened up!

Truth is, when guests are on their way, getting the “stuff” picked up isn’t much of a problem if there are already systems and routines in place. If like-items are stored in appropriate use-ready places, if each family member knows what his assignment is, if the place is simply cluttered as opposed to being in a state of filth, you can probably nail it in less than an hour.

But, what if your home is in a “state of filth?” What if you have company coming in only an hour?

Is your construction business ready for “company?”

Put another way – Do you have an exit plan? Are you preparing now for that day? Because you know as well as I do, some day “company” will arrive – will you be ready?

There are some construction contracting or service businesses which could be ready for company at the drop of a hat and others which wouldn’t be ready no matter how much notice they were given.

The process of getting your business “ready for company” necessitates the business practices and procedures that maximize the return from your construction contracting firm.

Let’s talk basics

You’ll have to implement best practices for construction business planning which at the very least includes:

  • management
  • operations
  • finances
  • marketing

A solid plan means you will have created operations manuals or their equivalent, and will have at minimum one training center. You’ll be able to document and implement your industry’s best practices, procedures, and systems.

Let’s talk about your job

There are two major jobs you, the owner, need to concern yourself with and they are –  creating career opportunities for your team and building a company that runs without you. Perhaps the greatest task you’ll face is to make yourself DISPENSABLE.

Let’s talk business financials

Knowing your exit plan will have you looking at your business financials in a whole new light. A few of the things you’ll see with better clarity are:

  • Having a budget in place
  • Understanding your accountability to employees
  • Determining to increase revenue, manage costs, and direct overhead spending
  • Organizing and measuring your rise to more profit

We can help.  480-442-4032 or Toll Free: 866-629-7735