Benefits of automating estimating
Estimates and proposals are the most important pieces of paper, next to contracts, in our industry. The security industry is one of the largest and fastest growing in the world today. But the management aspects of the industry have not caught up with current business trends. Many companies are still relying on Word documents and Excel spreadsheets for the generation of estimates. These pieces of paper seem to be the most elusive when they are needed; they are the most frequently misplaced papers within companies today.
If you have 50 outstanding estimates and no way to track them, and they sit separately in individual Word and Excel files, you will not have the ability to follow up on and close deals. The improper handling of estimates through disparate systems and the loss of revenue when estimates are misplaced or not tracked properly through the use of software can cost a company significant lost revenues in a given year.
Integrators today have to rely on salespeople being technically savvy. Most of the time, this is not the case, which results in salespeople estimating out technically unfeasible jobs.
Another recurring problem is loss of money on jobs due to low profitability built into the estimate. When salespeople build jobs, they usually have some numbers and ranges to work with, but if, for example, they underestimate the labor that will go into a job, the internal cost for you will go up and the profitability will be slim.
To avoid these mishaps, set up a quote approval process within the company, ideally through your software. To prevent salespeople from sending out unapproved jobs, industry-specific software programs give you password-protected estimates. This enables you to have up to three levels of approval before sending a quote out to a prospective client.
The first approval is a salesperson, the second is typically someone who is more technically inclined and the third and final approval level goes to someone who is checking profitability. Many times the salesperson and technician are the same, so you only need one additional approval level.
Find a program that will allow you to track approvals through internal notes; for example, once a technical person has finished approval, the software should be able to assign that quote to another person internally for approval. This way, all processes are not only finished on time, but there is accountability along the way. A quote approval process significantly increases your overall profitability.
NO PRE-WORK PROFITABILITY
Another downfall to not having your estimates managed automatically through software is the loss or unavailability of a pre-job profitability estimate. This estimating system allows you to get a rough estimate on your labor, material, outside services, and miscellaneous costs before the quote is sent out for approval. This avoids guesses about what you expect to spend on the job and increases control over your profit margin.
The loss of an estimate is probably the most embarrassing situation a security company can get itself into. It is not professional and you lose tracking of job cost and pricing. You have no forecasting of your job scope and therefore no idea of how much money you will be making or losing.
When using software to track estimates, you are able to keep on top of follow-up dates, and always retain important proposal information such as cost details by material, labor, outside services and miscellaneous costs. Estimate management also allows you to store proposals in a soft copy so that when a prospect calls in requesting changes or additional information, you are not going through paper piles or file cabinets. The estimate should be available with a click.
Veeral Lakhani is VP of operations for AlarmKey. Email him at email@example.com or call 516-679-1200 x213.