Audio transcript may not be 100% accurate:
Hi everyone, JJ back again with another episode of bleuwave live, today I’d like to talk a little bit about the pre estimating process. I think last time we ended up of kind of how to take care of the customer in a lead generation type thing and now I want to talk about it again. The pre estimating, probably break this down in a couple of videos.
But I get a lot of questions about how to dive in, when to dive in. When do you charge for it? Not charge for it. So let me just get started and go right into it from the perspective of a general contractor. Now this can translate to one of our trade partners or anybody else. And i’m just going to speak through our lens the way bleuwave looks at it and the way that we see that we can offer a difference to our customers in this regard.
So we get a call on a potential project and a lot of times else a. Can you give us a bit? The immediate answer is, well, no, because you know our time and money is worth something, try to ask a million questions and one of them, you know, all of the things that you can imagine.
Do you guys have the financing? How are you going to pre qualify this? What’s gonna be the decision making process once you get the bids? All those kind of things.
If, after those questions are answered, whether it’s by an owner or an agent or maybe even an architect, that’s reached out that’s representing an ownership group, then we will decide if we wanna pursue the bid or the quote per se.
And then it’s a process of getting the information out to our trade partners. A lot of times will do that to validate things as far as the numbers and sometimes even going back. One step is, are we doing a feasibility study, or are we doing a hard bid?
So in the feasibility realm, those are where there might be a chicken scratch sketch on a napkin per se and just a dialogue around what the project is envisioned to be, that’s more of a feasibility study.
And then a true bidder quote would be around cds or construction drawings, as we call them. So for those listening and watching who are novices there’s Michael and Devon stone run a company called markup in profit.
I’ll give them a little kind of lead in or kudos right now. They primarily operate as an advisor and consultant in the residential area. But I met Michael quite a few years ago, and he’s produced a number of books and blog’s and websites.
For those of you who are intimidated or frustrated by the estimating process, I would encourage you to reach out to him, look at his books, look at his products and read some of them because they’re very profound and breaking it down to some very simple elements.
Hey, goes into great detail about should you charge for your estimate? Should you not? What do you disclose? How is that a benefit to you or against you in certain markets?
And I think that one of the best things that he touches on that I encourage everyone to understand is your difference between mark up in margin. I’m not going to get into the explanation here, but again, for those of you who are having trouble deciding what that looks like in your own organization.
Please, please go through the due diligence to get that on the front and center of being accurate for what you’re going after. Even involve your accountant. If you need to these typically relate to what your overhead is, or through accounting terms, your sg&a and the more you know that, the easier it’s gonna be to put the rest of it together.
So then, once you jump into the actual estimating process, I can’t emphasize enough to have transparency. There’s a lot of arguments about what to do and what not to do here, but we’ve taken just a hardline stance that we’re gonna be 100% transparent, and I find it to be very educational.
So what it’s allowed us to do as a more of a startup versus a longer-tenured company is it gives us a little bit of an advantage where we can use that as an educational tool because at the end of the day, if you’re competing on price, you’ve already commoditized yourself in the marketplace, where if you have the ability to use the estimating process as an educational piece, notice that I didn’t say sales piece. I said educational, because i’m convinced that in today’s market, the consumer, if you are willing to give them a free education and free information, they will take that as i’m not saying that they’re going to give you a higher mark or trust you more.
But if you do it in the right manner, I do believe you’ll have a benefit against somebody that’s just giving numbers or giving what I call a sales pitch because it also usually leads to further dialogue of where’s the value engineering?
Okay, JJ as a general contractor, this number seems high within the estimate itself. What would you do differently? Once they start engaging and asking you questions about what were your expertise is you’ve already helped them notice again. I didn’t say it’s a win…