Nobody’s business is perfect. Running your own business is a game of trial and error from finding the right employees, maintaining a client base and making sure you have the right tools in place. In order to know where you are making money or possibly losing money, many turn to estimating software as a way to keep margins on target and to track where they’re headed.
There are several companies producing estimating software. Some of them are general estimating systems that must be customized for an individual business. Others are tailored to a broader construction industry and still a handful of others target the remodeling market.
Builder and remodeler Alternative Home Solutions of Mount Prospect, Ill. annually builds six to eight custom homes, completes six to eight renovations and room additions and one or two commercial jobs in a typical year. In order to keep track of all of its different projects, the company utilizes UDA’s ConstructionOffice software to be able to estimate project costs, schedule the jobs and integrate all of the information between their estimating software and Quickbooks from Intuit. ConstructionOffice allows Alternative Home Solutions to add and subtract fields allowing it to tailor the software to its needs and create different formats for its different projects.
“Once you have all of your initial costs loaded into the system you can easily print up proposals in a consistant format whether it’s a custom home or a $250,000 remodeling hob,” says Michael Mazer, president of Alternative Home Solutions “Consistency is what you need in an estimating system.”
Many remodelers start out like Alternative Home Solutions. Either everything is figured out through a long antiquated system of calling suppliers while handwriting a shot-in-the-dark guess at expenses and costs or a spreadsheet template is put together by someone at the company, generally using software with limited capabilities and options. Estimating software is designed to avoid these steps and allow remodelers to quickly and easily keep records of their business dealings.
“We were using an in-house system by creating templates in Excel, but we would miss things,” says Mazer. “By upgrading to estimating software we were able to get to the point, whenever we would forget something we would add it into our program and say ‘We won’t forget this again.’ A system like this forces you to do everything the same way like a check off list to make sure you have everything covered. To be competitive you have to know your current costs and keep your systems updated.”
Customers and business owners look at dollar figures differently. Homeowners want to know exactly what they’re paying for and resist shelling out money for anything more than they have to. Remodelers want to make sure they can keep their business going and still have enough to make a mortgage payment. Estimating software is one of those tools that not only help businesses make sure they are covering all of their expenses, but lays out the costs for their clients.
“The customer can see right away how a material change will affect the cost of the project because I go over the entire UDA estimate with them, including my profit margin,” says Tim Lassiter, president and founder of Houston Remodeling in Houston, Texas. “They know exactly where their money is going—which makes our customers confident that (we) will do the job for a reasonable price.”
Keying in on the details
There are three different platforms when it comes to estimating software. The first would be a standard software package that allows the user to enter in data and print off reports from a single computer. The second method would be a more networked software approach that allows several computers to work in the program at once and also allows remote connectivity options. The third way would be something along the lines of a Web-based system that is accessed on the Internet. These systems are managed and backed up by a service provider and reports can be downloaded to a computer.
It is important for business owners to do their own homework and ask questions in order to find the system that will work best for them. Once a system has been found it’s then just a matter of where to get started.
“Get together all the items you work with, classify them and get them all into the database,” says Plummer. “You have to quantify all your work activity.”
Corecon Technologies is a company that is well in the process of moving away from purchased software applications and is moving into the Web-based world of estimating. Corecon started its business focused on general contractors, but has expanded their reach to include everyone from architects to remodelers. Currently 10 percent of their client base is remodelers.
“Web-based subscription service will be the business model in the future,” says Norman Wendl, president of Corecon Technologies, Inc. “The mobility allows access anywhere at anytime, meaning users don’t have to just be back at the office, plus it allows us to lower costs and offer a higher quality service to our customers.”
Overall, most of the estimating software available today has three main components. The first is the ability to customize fields and tailor the reports to your business. Another option is to create a database of products and prices. This is either entered manually by the business or, in some cases, a limited amount can be uploaded through a database service or company. Finally, all the data collected in the estimating software can be uploaded to an accounting program, generally Quickbooks.
The two sides of software
Not all estimating software is created perfectly. Some feel that the software they have implemented could use some changes. For instance, some would like to see real cost integration with their software while others seem to go along with wanting changes by having product information they can update their systems with.
“One thing that I would add to the estimating component is an items database,” says Lassiter. “Right now, we can save our costs in our own custom templates, which work pretty well, but I know they’re developing an items/cost database that will make it even easier to insert new items into my estimates.”
The good news is, if you aren’t sure what sort of estimating software to choose, many companies like Coon Creek Software, offer free trials of their products in order to try before you buy. This can range from a reduced downloadable version to full version 30 day trials. Other companies may even have a full money back guarantee incase the estimating program you’ve chosen doesn’t fit with your business the way you had hoped it would.
Companies are also constantly updating their systems and offerings in estimating software. Between new versions and features, there is always something new to be found in the latest versions.
“I’m continually upgrading the software,” says Paul Plummer of Coon Creek Software, which produces Estimate Master. “I listen to what the customers are saying and if it makes sense I add it to the software.”
Intuit, makers of QuickBooks: Premier Contractor Edition, Enterprise Solutions: Contractor Edition and Intuit Master Builder, is getting into the game of estimating software. This year they have launched QuickBooks Easy Estimate to supplement their software offerings. Additionally, Corecon is moving to link more of its products to more accounting products and is in the process of creating a building materials database of its own to offer its clients.
Whatever estimating software is chosen, it is important to make sure that it works for the business. Settling for a product that doesn’t allow the user to do all that they want can cause more problems as well as a system that has way more than what is needed.
“Corecon is not a solution for someone just starting out,” says Wendl. “Our users are companies with larger projects at a minimum of one to two week-long jobs or more. It’s for people who’ve been around the block for awhile who need new systems.”