Joanna Mulgrew, Managing Director of HBXL Building Software, shares her advice on making money rather than losing it.
In a year marked by economic turbulence, the pressure building firms face is real. We know. At HBXL we’re talking to builders every day. The temptation to give an overly competitive price to secure projects is understandable, but before you tread this path, consider the far-reaching consequences. The appeal of undercutting the competition could erode your hard-won profit. Under-pricing projects can result in long term losses that will impact your stability and growth. Knee-jerk reactions are inadvisable.
Estimating software: your best strategy
Your best ally – professional estimating software. The current economic landscape demands total accuracy. Software is no longer an after-thought, it’s essential to business success. With the right software you can factor in the latest material prices, inflation, wastage, wear and tear, and overheads. And that’s because you need to be producing accurate project estimates that reflect the realities of today’s market – not a discounted one that will leave you out of pocket. Yes, you might miss out on a job because you’re not as cheap as someone else, but why work on something that will keep you busy yet have nothing to show for it? You might as well catch up on your construction projects at home!
Proper organisation is key
Skimping on your planning leaves you open to costly delays and escalating expenses down the line – way beyond what you originally estimated. Remember, every minute spent on scheduling materials, plant and labour is an investment that shields you from unwelcome financial surprises. As well as eating into your profit margins you risk damaging your reputation as a reliable builder. With the right estimating software you get ‘Just in time’ schedules of everything you need to order, and every subbie you need to book in well in advance – all linked to your ever-evolving build programme.
Customers are feeling the financial pressures too, and they want builders who can promise reliability. As you’re quoting for the job if you can showcase your commitment to timely completion and organised scheduling, you’re ultimately ensuring customer satisfaction. A project management app that allows the customer to see first-hand what progress is being made on site, could very likely win you the work.
Establishing clear payment structures
Financial stability is paramount in the midst of inflation and rising living costs. As you email over invoices to customers, it’s crucial to have a solid contractual framework in place. Without clearly defined payment terms and some legal clout, you open the door to late payments, disagreements, and cash flow disruptions. In these times, airtight payment obligations are your saviour.
Safeguarding profits in unpredictable times
Balancing competitive pricing with profit preservation is a challenge. The repercussions of under-pricing, inadequate planning, and lax payment terms are magnified in this climate. So, to reiterate, your armour against these threats? Estimating software, contract software and a job management tool that will secure your business’s financial health.
The power of EstimatorXpress
Take the estimating software, EstimatorXpress, that HBXL developed for small to medium sized building firms. It accurately calculates the true cost of the job, tracks the latest material prices, and among many useful reports, automatically produces material schedules and cash flow analyses – all included in the price of the software. The onboard Gantt chart cascades the changes when there’s a delay… I could go on.
BuildProjex manages your projects
And the new kid on the block is HBXL’s BuildProjex which is currently being soft launched. It’s a first in the UK – a cloud-based project collaboration software tool exclusively for the UK residential construction market. You can plan, track, share and manage construction projects. Employees, sub-contractors and associates can share drawings, updates, tasks, progress photos, Gantt charts etc. Customers can see certain updates. It’s early days but we’re seeing the appetite to plan better is there.
ContractsXpert has your back
A simple bit of software. Our legal team has done the hard graft and the software writes the contract for you. You answer some questions and print off our exclusive Small Works Business-to-Business contract, Consumer contract and Subcontract contract in minutes! No one is in doubt about the work covered, value, obligations, payment timings, defects, termination, warranties, insurance…
What next?
As long as you commit to making money by charging accurately and managing your business efficiently, you can expect long term rewards. You’re not just building properties; you’re fortifying your future. And as Warren Buffet, the highly successful American businessman once said, “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” I rest my case.
You can put EstimatorXpress and ContractsXpert to the test during a free 14-day trial – download it instantly from the HBXL website at www.hbxl.co.uk/trial-request
