Are you interested in starting a commercial estimating department in your roofing company?
Join industry expert and CEO of Cotney Consulting Group, John Kenney, as he shares his tips and tricks!
Whether you are a residential roofing company expanding into the commercial market or an owner of an existing commercial roofing company tasked with the estimating duties yourself, one option to consider is starting a commercial estimating department. If this is something you are considering, know this – it can be costly and not necessarily a good idea if you don't do it right.
It requires smart hiring decisions, the commitment to furnish the department adequately, and a time to trust yourself and go where the market leads you.
Commercial work is attractive because it comes with a significant payoff. Even if commercial construction has not been your company's forte, it becomes more enticing as a service you can offer at minimum risk if correctly executed and rewarding you with maximum potential cash flow.
If you decide to take the plunge, you will need some advice on setting up a commercial estimating department.
Focus on Hiring a Senior-level Estimator
Do not make the mistake of hiring an estimator who has not worked at the job full-time in the past. Instead, hire a dedicated estimator with a good track record who can project manage. Always hire a senior-level estimator, not your kid right out of college or the long-time employee who now wants to be an estimator when starting to build your department.
Good estimators do not come cheap. You may end up paying as much as you pay yourself. The only reason a good estimator will work on the cheap is if they have undisclosed baggage. Be prepared to pay. Do not even try to hire an estimator using a low base salary with a total package promise later. They will consider it deceptive.
If the person you hire is from outside the area, be prepared to pay moving expenses.
Understand the Role
Once on the job, realize that your estimator is not someone you can pull out of estimating to market for you or collect overdue bills. Expect them to work 40 hours a week, estimating and keeping excellent and accurate records for each job.
The estimator will keep complete job files on each project, including contact information, tick sheets, materials quotes, etc. They should be able to explain why they estimated a job in a certain way.
Prepare a quiet area for the estimator to work to maintain a high level of concentration to avoid mistakes. Provide a company-issued laptop computer and cell phone so that you can keep tight control over their use. Insist they use what the company provides.
These tips will all lead to increased productivity.
Before starting the bidding process for jobs, make sure to have a solid preliminary risk analysis (PRA) in place to assist you in your decision-making process of whether you bid or not bid on a project. It prevents wasting your resources and is a beneficial factor in selecting projects for bid.
If you decide to bid on the project, keep this in mind – the new estimator may only be able to bid on two small jobs per day or two big jobs per week. It would be best to consider those bids and what percentage of work you will win.
Few do estimate by hand anymore, and without a computerized system, the estimator will not be fast enough to get the work done and allow your company to profit. Estimating systems can be costly but well worth the investment.
Be prepared to lose out on bids until you get a few small jobs in the win column and general contractors and consultants become more familiar with your company.
Estimator Skills and Core Competencies
A top estimator will have a broad set of technical and nontechnical skills to perform effectively in their position. Before hiring for this position, define the requirements for recruiting purposes.
Core competencies include software, business, general, and communication skills. They must understand the capital project process and the ability to read design documents and code requirements, deal with project controls, and analyze data, among other skills.
A good estimator will be competent in using estimating software and know-how to make presentations, write reports, and listen. Also, an organized individual who is resourceful, a problem-solver, and someone who knows how to delegate.
Manage the Workload and Measure Performance
Monitor the workload for one or more estimators. Know where each project stands. Using the estimating software, the estimator can enter all new estimates, start time and completion date, and how many hours they expect to work on a bid.
Ensure the estimate is complete by verifying that all project costs and hours needed to perform the job are included.
It would be best if you had performance measurements for estimators. This should be reviewed at weekly meetings. Use a workload reporting system to keep track of the estimates.
An estimate should be "owned" by the entire project team, not just the estimator. Once the initial estimate is prepared, project managers should stay involved to make any required updates and keep the estimator involved.
If you will go this route, be prepared to seek a senior-level estimator with core competencies and pay them what they are worth. Set up a proper office in a quiet area. Be realistic about what they can accomplish in a given week or month. And continually monitor work to ensure bids move along, leading to more wins for your company.
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