Masonry Estimations: How to Lower Costs, Increase Efficiency
By Paul DelFino
Over the past 3 years I have had the pleasure of conducting monthly marketing seminars for small business home improvement contractor entrepreneurs. I begin each session by asking some questions of the group.
–What is the geographic range of your service area? Average Answer – 60-90 miles
–How much time do you spend on site doing an estimate? Average Answer – 30 minutes
–What are you worth an hour? Average Answer – $100
–What does each estimate cost you? Average Answer – “Blank Stare”
It does not take an MBA to calculate that 1 hour drives to and from an estimate combined with the time on site then added to the paperwork and fuel has these entrepreneurs spending $300 to do an estimate.
NO ONE ELSE CAN DO IT
The revelation that these experienced small business people are spending that much for a “maybe” is interesting to behold. It is usually followed by group discussions where to a person they conclude that:
-‐They cannot trust anyone else
-‐They have no time to train anyone else
-‐They would look forward to delegating the responsibility but……
STANDARDS & SALES DISCIPLINES
At this point I enjoy offering up a few more questions.
What is communicated to a prospect as a commitment when they contact your company? That is how quickly you will follow-‐up and be on site to look at the potential job? Average Answer – “More Blank Stares”
Do you communicate by E-‐Mail confirming your appointment for an estimate in the coming day(s) and include a photo and background of the estimator who will be visiting the site? Average Answer – “Stares Turn to Smiles”
What is your closing ratio by: geographic segments of your market, type of work, size of job or referral source? Average Answer – “Suggestions that I am from another planet!”
Do you have a mechanism to touch base with each prospect with an outstanding pending estimate every week with an email or phone call to expedite closing the deal? Average Answer – “Confirmation that I am from another planet!” It is here that the groups usually work to explain the facts of life to me.
–Doing estimates is something entrepreneurs do; before the job, at end of day, and on weekends
–That no one in their size company has the resources with the skills and disciplines to do these “big company kinds of things”
–That if they hired someone to do all these things they would not make money!
But to a person they all concede that in their industry such behavior by a smaller contracting firm would be: a true differentiator, a level of service and professionalism that could warrant increased perceived value and therefore potentially higher pricing and increased profit.
THE TECH SOLUTION
Over the past several years new technology products have become available which allow small business contractors to present an image and to deliver a level of service mirroring the most sophisticated national service firms. It all started with cloud based CRM (Customer Relationship Management) systems. These tools allowed mobile entrepreneurs to deploy mobile devices to manage their customer contact information in real time. However most recently, Business App developers have perfected tablet software which is nearly plug-n-play allowing contractors to easily execute on each of the recommendations inferred in my questions to the groups.
Envision a system that costs you $10-$30 per month which:
-‐Offers you a phone/tablet based CRM system where each contact with each customer can be recorded by each person in your company.
-‐Offers you a tablet estimating tool which incorporates pictures and project itemization that easily prepares estimates on the spot during a prospect site visit where you can email your customer a professionally produced estimate on the spot incorporating photos (a portable printer in your truck solves anyone’s need for paper)
-‐Provides up to the minute real time reports of outstanding estimates
-‐Provides tools for emailing prospects; confirmations of appointments, follow-‐ups and even post job, before and after photos for their records with your invoice.
-‐Plots your pending estimates and pending jobs on maps to improve the scheduling and ease of site visits.
AN EXAMPLE OF PERFECT EXECUTION
Over the past year many contracting support firms are commissioning app developers to create custom apps to make the vision above a reality. The customization simply implants arithmetic tools and fields where the service experts provide in the app design a capability for the app to calculate price by dimension of a job. As an example a plumbing installer identifies the parts and work required for replacement and takes a picture with their tablet. Each contractor has preloaded their individual pricing, determined by market and circumstance. The app produces the estimate for Email/mail to the customer and populates all the supporting systems for record keeping and continuous contact with the prospect. A click of a button gives a contractor a map spotting all pending estimates and jobs. This technology is being applied in: concrete repair, concrete replacement, waterproofing, spray foaming and I predict it will be the standard in many more.
Over recent months I became familiar with an ideal execution of this program where HMI, (www.concreteraisingsystems.com) a concrete lifting and leveling manufacturer commissioned Logical Engine, (www.EstimateRocket.com) a business app software developer to create a system to maximize the efficiency of their customers. A tour of that systems and the potential can be viewed at (http://www.mudpumps.com/information-‐center/estimate-‐rocket/).
IN THE END IT’S ALL ABOUT MONEY & GROWTH
Some years ago I began a consulting assignment with a small concrete contractor by asking him about his estimating process. He told me: 1) “it would take six years to train an estimator” and 2) “he could not trust anyone else to do estimates.” I told him; “I was leaving because, if that were true that he is destined to be the same size company forever!” That company is now: deploying technology in estimating, has a full time estimator doing 20 estimates a day, is 4x larger and that entrepreneur plays golf on the weekends vs. running around giving estimates.
If you are happy spending hundreds of dollars per estimate and limiting your growth -‐ that is ok and one of the great values of being an entrepreneur. Doing it your way!
BUT: What will your competition be doing next week and what will your customers think?
Paul DelFino is a principal of the consulting firm Opportunity Inc. For nearly two decades he has assisted entrepreneurs in growing their businesses, responding to economic downturns and merger and acquisition activity. His publications include “Skewed Entrepreneurial Strategies” available from all on line booksellers. Visit www.opportunity-inc.com to learn more.