Is outsourcing your estimating a good idea?
Did you know that contractors on average lose $200,000 a month in project contracts from doing their own estimates? The cost of in-house estimating may be much higher than you think, especially when you consider what it does to your business.
Wasting time on estimates can cost you job opportunities, limit your ability to make more bids, and distract you from growing your business. Here’s three reasons why you need to start outsourcing your estimating TODAY.
Why outsourcing estimating is a must
It’s no question that it’s hard to manage a construction business these days. As a busy contractor, it’s in your best interest to delegate your busy work. Let’s go over three reasons why outsourcing your construction estimating is a must:
- You can land an unlimited number of jobs
- Not outsourcing makes estimating a wall to your business
- Outsourcing is the secret to “fighting fires”
1.) You can land an unlimited number of jobs
In previous articles, like in our article on tips for construction estimating, I mentioned how most contractors only win about 1 out of every 10 bids they make. This means that if your business is going to go anywhere, you need to start making a larger amounts of bids. Here’s how you can through outsourcing your estimating:
Step 1: Generate more leads
How do you start bidding more jobs? You need to get more leads.
If you do commercial, a quick way to start getting a lot more leads is to sign up for a lead generating service like the Blue Book or Dodge. If you do residential, Home Advisor is another good option as well. These services show you bid invites near your location and can give you a variety of jobs to choose from every month.
Alternatively, You can also make your own Google ads as a paid method to get inbound leads.
Whether you’re using these services or not (although they tremendously help), you need to start filling your bidding pipeline. Ideally, you want to have access to more bids than what you can handle, so that way, you have options on which jobs to select.
Step 2: Enlist the help of an estimating service
So at this point, you have a long list of potential bids and you’ve selected the best ones. What do you do now?
If you don’t have an in-house estimator, then handling this list yourself will be a big challenge.
In other articles, I’ve talked about how estimating all your bids yourself is detrimental to your company. For something as important as your sales and your estimating, wouldn’t it make more sense to delegate these tasks to keep up with their demands?
Whether you choose to outsource or not, it is clear that it’s in the best interest for most contractors to manage an estimating department of their own, rather limit their estimating to themselves only.
When thinking of your leads, estimating, and bids as parts of a pipeline, outsourcing your estimating is the best way to maximize the flow into this pipeline.
By using a third-party estimator, you can start estimating more bids for a lower price than what you would pay for a in-house estimator and you can simplify your estimating routine to just verifying and editing finished proposals.
Most industries already do this. Here’s an example:
Think of a typical dentist visit. The patient shows up for their appointment and first gets a cleaning by the hygienist. The hygienist may spend a couple hours with this cleaning, performing x-rays, or whatever busy work that needs to be done. Then, and only then, does the dentist make his appearance, evaluating the cleaning and giving a thumbs-up. That’s it.
The principle to learn here is that, you shouldn’t be wasting your time doing busy work. As the owner of your business, you’re more valuable to your company than just measuring takeoffs. You should be the face of your firm: managing your jobs, meeting clients, and as for estimating, you should just be looking at the numbers to give a thumbs-up.
When a true expert never performs the brunt of the work, but uses their expertise to act as a consultant. My old boss used to have an analogy for this concept. He said that he would act as “the guy with the screwdriver”, visiting all the different departments and tweaking here and there, wherever he was needed.
This is the secret to efficient construction management and shows why outsourcing your estimating may be the one thing that can singlehandedly change your business.
Step 3: Get your estimating for free
Free estimating? You read that right. The last step in getting unlimited jobs
The key is building your costs in to your overhead
A lot of contractors don’t realize that in the same way that they’re adding wages, salaries and other office expenses into their bid proposals, they can also add their estimating costs.
This concept of adding expenses into your pricing is called overhead. So if you put all of your acquisition costs, which includes your estimating, hiring a third-party estimator won’t add much of a difference to your expenses.
2.) Not outsourcing makes estimating a wall to your business
I always like to compare estimating to a “wall”, so imagine if you will the Great Wall of China. That might sound nice, but in this analogy the northern invaders are actually your leads and your estimating is keeping them out of China (your business).
Since estimating slows your conversion of leads into bid proposals, the longer your estimating takes, the more of an obstacle it is to your business.
The solution is to tear down the wall. Outsource your estimating and just like the dentist in our previous example, be more efficient with your time by evaluating the busy work, rather than doing it.
3.) Outsourcing is the secret to “fighting fires”
Fires are your enemy. Fires are the everyday emergencies you have to handle at the jobsite, and these distractions can make estimating impossible.
Here’s a question: Have you ever sat in the middle of the workday and try to estimate a job? If you have, you may have felt a little like this:
Estimating while managing worksites is a nightmare.
When you’re responsible for your subcontractors, your pieceworkers, or your superintendents, setting aside time for something that demands as much focus such as estimating is unlikely.
Studies have shown that when one is interrupted during in an intensely focused state, it could take up to 45 minutes to return back to their original focus.
Perhaps you have tried estimating, but found precious hours taken up by slight detours into answering emails or phone calls. These distractions add up, costing you time, which costs you bids, which costs you money.
Even if you are able to manage these distractions, how accurate would your estimating really be? Again, calculating takeoffs and costs is a tedious task that takes uninterrupted, intense focus.
With outsourcing estimating, you greatly reduce your risk of losing money and making mistakes on each estimate, especially with services like ours that have a $1 million accuracy guarantee.
The Secret to 10X your Construction Business
If you are interested in growing your construction business, I’ve prepared a short training video for you that you can watch for FREE:
In this training, I will show you how you can put your estimating on autopilot and boost your sales to 10X your business in 90 days; step-by-step with a simple copy and paste formula!
Is outsourcing your estimating a good idea?
Did you know that contractors on average lose $200,000 a month in project contracts from doing their own estimates? The cost of in-house estimating may be much higher than you think, especially when you consider what it does to your business.
Wasting time on estimates can cost you job opportunities, limit your ability to make more bids, and distract you from growing your business. Here’s three reasons why you need to start outsourcing your estimating TODAY.
Why outsourcing estimating is a must
It’s no question that it’s hard to manage a construction business these days. As a busy contractor, it’s in your best interest to delegate your busy work. Let’s go over three reasons why outsourcing your construction estimating is a must:
- You can land an unlimited number of jobs
- Not outsourcing makes estimating a wall to your business
- Outsourcing is the secret to “fighting fires”
1.) You can land an unlimited number of jobs
In previous articles, like in our article on tips for construction estimating, I mentioned how most contractors only win about 1 out of every 10 bids they make. This means that if your business is going to go anywhere, you need to start making a larger amounts of bids. Here’s how you can through outsourcing your estimating:
Step 1: Generate more leads
How do you start bidding more jobs? You need to get more leads.
If you do commercial, a quick way to start getting a lot more leads is to sign up for a lead generating service like the Blue Book or Dodge. If you do residential, Home Advisor is another good option as well. These services show you bid invites near your location and can give you a variety of jobs to choose from every month.
Alternatively, You can also make your own Google ads as a paid method to get inbound leads.
Whether you’re using these services or not (although they tremendously help), you need to start filling your bidding pipeline. Ideally, you want to have access to more bids than what you can handle, so that way, you have options on which jobs to select.
Step 2: Enlist the help of an estimating service
So at this point, you have a long list of potential bids and you’ve selected the best ones. What do you do now?
If you don’t have an in-house estimator, then handling this list yourself will be a big challenge.
In other articles, I’ve talked about how estimating all your bids yourself is detrimental to your company. For something as important as your sales and your estimating, wouldn’t it make more sense to delegate these tasks to keep up with their demands?
Whether you choose to outsource or not, it is clear that it’s in the best interest for most contractors to manage an estimating department of their own, rather limit their estimating to themselves only.
When thinking of your leads, estimating, and bids as parts of a pipeline, outsourcing your estimating is the best way to maximize the flow into this pipeline.
By using a third-party estimator, you can start estimating more bids for a lower price than what you would pay for a in-house estimator and you can simplify your estimating routine to just verifying and editing finished proposals.
Most industries already do this. Here’s an example:
Think of a typical dentist visit. The patient shows up for their appointment and first gets a cleaning by the hygienist. The hygienist may spend a couple hours with this cleaning, performing x-rays, or whatever busy work that needs to be done. Then, and only then, does the dentist make his appearance, evaluating the cleaning and giving a thumbs-up. That’s it.
The principle to learn here is that, you shouldn’t be wasting your time doing busy work. As the owner of your business, you’re more valuable to your company than just measuring takeoffs. You should be the face of your firm: managing your jobs, meeting clients, and as for estimating, you should just be looking at the numbers to give a thumbs-up.
When a true expert never performs the brunt of the work, but uses their expertise to act as a consultant. My old boss used to have an analogy for this concept. He said that he would act as “the guy with the screwdriver”, visiting all the different departments and tweaking here and there, wherever he was needed.
This is the secret to efficient construction management and shows why outsourcing your estimating may be the one thing that can singlehandedly change your business.
Step 3: Get your estimating for free
Free estimating? You read that right. The last step in getting unlimited jobs
The key is building your costs in to your overhead
A lot of contractors don’t realize that in the same way that they’re adding wages, salaries and other office expenses into their bid proposals, they can also add their estimating costs.
This concept of adding expenses into your pricing is called overhead. So if you put all of your acquisition costs, which includes your estimating, hiring a third-party estimator won’t add much of a difference to your expenses.
2.) Not outsourcing makes estimating a wall to your business
I always like to compare estimating to a “wall”, so imagine if you will the Great Wall of China. That might sound nice, but in this analogy the northern invaders are actually your leads and your estimating is keeping them out of China (your business).
Since estimating slows your conversion of leads into bid proposals, the longer your estimating takes, the more of an obstacle it is to your business.
The solution is to tear down the wall. Outsource your estimating and just like the dentist in our previous example, be more efficient with your time by evaluating the busy work, rather than doing it.
3.) Outsourcing is the secret to “fighting fires”
Fires are your enemy. Fires are the everyday emergencies you have to handle at the jobsite, and these distractions can make estimating impossible.
Here’s a question: Have you ever sat in the middle of the workday and try to estimate a job? If you have, you may have felt a little like this:
Estimating while managing worksites is a nightmare.
When you’re responsible for your subcontractors, your pieceworkers, or your superintendents, setting aside time for something that demands as much focus such as estimating is unlikely.
Studies have shown that when one is interrupted during in an intensely focused state, it could take up to 45 minutes to return back to their original focus.
Perhaps you have tried estimating, but found precious hours taken up by slight detours into answering emails or phone calls. These distractions add up, costing you time, which costs you bids, which costs you money.
Even if you are able to manage these distractions, how accurate would your estimating really be? Again, calculating takeoffs and costs is a tedious task that takes uninterrupted, intense focus.
With outsourcing estimating, you greatly reduce your risk of losing money and making mistakes on each estimate, especially with services like ours that have a $1 million accuracy guarantee.
The Secret to 10X your Construction Business
If you are interested in growing your construction business, I’ve prepared a short training video for you that you can watch for FREE:
In this training, I will show you how you can put your estimating on autopilot and boost your sales to 10X your business in 90 days; step-by-step with a simple copy and paste formula!
