Use a sure-fire system to get those project proposals out fast and back to the client to alleviate any headaches on the backside. To ensure low frustration, starting from the beginning and getting an estimating system set up can make the job easier to facilitate and not leave your clients scratching their heads waiting for the project proposal. Let’s go through the steps of creating an estimating system.
A Project Proposal Starts with an Accurate Budget
It all starts with a budget. Yes, may know the quantity and the price for the product to be sold but look at your financials (Profit & Loss statements for last complete calendar year, payroll summary for a calendar year, and equipment list including trucks, machinery) and build in overhead recovery and profit unique to your company.
- Examine the sales for last year and what the sales goals are for this year.
- Next, how many crews (hours, wages, taxes, benefits) will it take to attain that sales goal? Which equipment and materials do you need? How much? The cost?
- Include subcontractor costs, rental and delivery costs.
- Factor overhead costs in too. These expenses include your rent or mortgage on the buildings, insurance, utilities, phones, banking fees, office
managers, bookkeepers, mechanics, owner’s wages, office supplies, advertising, brochures, computers, etc.
All of these costs come off the sales figure leaving you with the net profit.
Systems for Proposals
LMN system is a good tool for the green industry entrepreneur. Access the analysis tab to get see the gross profit margin, net profit and where the cost ratios fall. The analytics are very helpful information to meet your overall goals as a company and ensure a profitable outcome. LMN also gives industry averages and standards on which to gauge how the company is comparatively. This is helpful in adjusting your goals and budget. LMN can then transport the estimate through QuickBooks Online and sent it to the customer.
A view from the products and services list in QuickBooks Online
Use Quickbooks Online to build a project proposal. The estimator will have to realize that it doesn’t have the budget installed in the system. There is no analytics to indicate gross profit margins. This method is a simplified version of doing estimates.
Access the expense report for the past year to help determine the overhead costs as well as labor and materials. Consult your accountant or bookkeeper for help in this area. A day’s worth of investment to acquire these significant numbers will give a healthy return on your investment.
Project Proposal: Pricing of Materials
A sample portion of an availability list from a vendor.
Gathering current pricing sheets from all your vendors and resources will be the first step. Receiving them in an Excel spreadsheet makes it easier to load into industry system programs with the pricing attached. Next, add the retail price to the worksheet. Watch these prices carefully and communicate with your vendors on what plants have increased or decreased in price each month and adjust in your programs as necessary. Third, choose the plant material that you will likely use the most and delete the rest. (A new plant can always be included later.) A virtual assistant can add descriptions of each plant which will help when designing and also give the client a good understanding of what they are buying when included in the project proposal.
Don’t Forget This!
Adding the plant amendments such as fertilizers, the variety of mulches, variety of machinery used will be entered into the system to access quickly. Remember to include charges for shopping, purchasing and delivering your plants, materials, and machinery. The time procurement needs to be evaluated and put into that budget. Haul away charges for different loads such as organic debris versus trash items or recycling will be included in your system. Next, enter the variety of services and the labor cost per hour.
When the pricing is up to date, a project proposal is ready to implement. If you need help in keeping those project proposals up to date and current, you might need a virtual assistant that knows the green industry! Give me a call and let’s chat.
