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PLUMBING CONNECTION
AUTUMN 2016
THE ART OF PLUMBING ESTIMATING
“
I would prefer to pass on a project and lay on a beach
somewhere, than to under quote the job and work
myself bankrupt,” Andy says.
Estimating or quoting, is fundamental for any plumbing
business to be successful in a service based business as
potential clients will almost certainly request a quote from
you prior to awarding a project. If the job has been priced
correctly, then it is fair to say you’ll make a decent profit.
Get it wrong, and you may lose money and unfortunately, in
some cases, much more.
The competitive landscape of the plumbing industry has
evolved over the past few decades. Clients and builders alike
are highly motivated to reduce costs and seek value for
money when building a project, sometimes accepting the
lowest submitted price in order to achieve a set budget. This
practice can be to the detriment of the plumbing contractor.
As the margins get tighter and projects become more
fiercely contested, it becomes much harder to successfully
bid for a project. In recent years, I have been invited to
submit tenders for projects only to find out over 20 other
plumbing companies are competing for the same contract.
The chances of winning the contract are slim, and then
to make a fair and reasonable profit becomes extremely
concerning.
So, what’s the solution to reducing the risk of falling into
the trap of under-quoting projects? Simple: be consistent
and know your bottom line.
Implementing a comprehensive estimating system that
you have confidence in is vitally important, especially if
you aim to achieve accurate quotes on a consistent basis.
Consistency can only be achieved through experience,
practice and prolific record taking. It’s like anything else in
life, ‘practice makes perfect’ and estimating is no exception.
It is very important that you give careful consideration
when deciding which method of pricing is suitable for your
business.
MISQUOTING CLIENTS CAN MEAN YOU ARE ALREADY ON THE BACKFOOT BEFORE PICKING UP A SPANNER. HAVING
A CONSISTENT ESTIMATION PROCEDURE IN PLACE IS JUST GOOD BUSINESS.
ANDY FARRELL
EXPLAINS.
ESTIMATING
ANDY FARRELL