There is no doubt as an experienced builder, you can do a great job of pricing work. But is that the best use of your time?
There are several factors to consider when trying to decide on the best approach for your business.
You make real money by working on the business not in the business. The thing in shortest supply in most businesses is time – time for the key people to work on the business. Doing the pricing yourself is working in the business and is worth your hourly rate. Working on the business is about winning customers and delivering profitable projects – and this is worth several times your hourly rate. If you can replace tasks you do in the business with someone else’s time, your business will be better off.
Credible builders win the work; most projects are not won by the lowest price.
Clients will only deal with people that they trust. If you do a good job of presenting your proposal, you build credibility. So don’t overlook the “non-price attributes” – the factors that influence the client’s decision but are not the price. How well do you present? Will you do a good job? Are you credible? Does our proposal give them confidence that you can get the job done for the price?
A fast response means more wins.
The faster you get your proposal back to your client, the better chance you have of winning the job. If you are trying to fit pricing in around everything else that you have to do, then you are probably taking longer than using a QS would.
Get more proposals out, win more business.
It is a numbers game – the more potential clients you are working with, the more likely you’ll win the jobs. If you are doing it all yourself, you are limiting the ability for your business to grow.
Know which jobs are worth quoting on.
Don’t price everything that comes in the door, as more isn’t always better. Pricing jobs that you have no chance of winning will always cost you. The idea is to prequalify the client. Make sure their expectations for the build align with their budget, otherwise the job will never fly. Try to see if they are using you for a test price – ask who else they are talking to and how long they’ve been talking for. If you are down the list and they are almost good to go, then you are probably just a check. If they are talking to too many builders, your odds of winning drop. If they say the criteria is only price, then you probably don’t want to go there.
Getting a professional take-off costs money, but what does your time cost?
If hiring a QS costs you $120 an hour and your charge-out is $55, then it would save you money doing it yourself right? This ignores the value that you add to your business above your hourly rate. As the key person in the business, your primary function is bringing in the work and ensuring that you make profit on it. That is worth much more than your hourly rate.
By Nick Clements
Managing Director, YourQS