I was at the IWF 2014 show last month with my new company,  talking about estimating and how people estimate their work.

Wood Operations Allocations

Accounting/Estimating/Sales

Engineering

Project Management

Shop Production

Onsite Installation

Not Billable

Billable

Billable

Billable

Billable

Do you know that most companies have their own spreadsheet that someone in the company made years ago? It works because they have adapted to it over the years.

"This is what we have been working with for as long as I have been here," they say. "It’s OK but it needs to be upgraded."

Does that sound familiar?

At IWF, I had other companies tell me that they get great results from their drawing packages, but they have to draw the projects before the software can estimate the job.

When I asked them a question about where their bottlenecks are, invariably they said their drafting and design department, for starters. Ya!!!

Why is it that companies are paying their draftspeople to estimate, when they can’t get their regular drafting work done to keep the shop moving? Makes no sense to me.

I understand that any good drawing package that gets the parts ready for cutting, machining and material counts should be able to estimate the project. I agree.

But quit estimating with your drawing software, since it is now costing you 100% overhead for your draftsperson that should be making you money.

Some of you feel a need to take drawings to the client to impress them with their particular design. Your competition does it with their cabinets, and others do as well.

But the client in most cases has already had it drawn by a designer or architect, so they know what it is going to look like. If you feel a need to take drawings to a presentation, why not take them  pictures of the finished work, with more photos than drawings.

They will get more from that, than from 8½ x 11-inch drawings -  since now you have pictures of the project, finished. Most clients don’t know what exactly it is that you are showing them. So why are you paying your draftsperson to estimate?

Keep the proposal estimate process simple; as you grow, break it down to more detail, so you can manage it better. But start with simple departments that will keep the work moving.

A commercial estimator wins 8 -15% of the work he bids on blind, on an average. He is good with people, a people person and responsive to the client. He needs a way to estimate quickly and accurately. (That is why we developed ST-Mate, a front office complete system, in the first place.)

The engineering department needs thinkers. They need quiet to really get into their job, and to get it done. And they don’t need to be interrupted at all, once they get the project. Remember, they are now making you money, so why would you want to stop this train to request a drawing just for an estimate.

Start small with departments and grow as needed. I know that when the estimating department was jammed we had our project manager’s help when possible. Keep it simple and work hard to get your overhead down. That way you make profit sooner each month when you get your overhead covered. Once this is covered you really start to see that bottom line grow.

 

 Accounting, Estimating / Sales Department.  ALL 100% Overhead

1.       Engineering / Drafting (always a bottle neck)                 Billable

2.       Project Management                                                          Billable

3.       Shop                                                                                       Billable

4.       Install                                                                                      Billable

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