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