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The 4 Estimating Keys to Ensure Profitability & Client Satisfaction

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If you are like most trades’ sector entrepreneurs you have spent vital and unplanned time throughout your career addressing issues on jobs that were ultimately caused by a lack of planning or a gap in communication between yourself, your employees and your customers.

In order for your business to grow and become more efficient, it is crucial to adopt a mindset that embraces strategies which decrease time spent addressing unplanned job events. Your business must reach a place where you feel comfortable handing over control of a project to your capable staff, and you are confident that they will deliver a quality service to your customers.

Many trades entrepreneurs have a consistent method for carefully considering and calculating project components such as time & materials (if you don’t, click at the bottom of the article to download our standardized estimating system). However, many forget to consider project intangibles, that have the ability to make or break the success of a job.

At Breakthrough Academy, we’ve worked with hundreds of fast growing and successful companies, and it’s become clear to us that the majority of problems that arise during a project can be avoided when a clear communication plan is developed for each project when planning for it. Every communication plan should outline a system which ensures that the right conversations will happen during the initial meeting(s) with a client, and that the staff are clear on how to execute the project at a high level of quality.

There are 4 key elements of a communication plan that should be established and can be categorized using the following acronym: DECA – Deliverables, Exclusions, Constraints, Assumptions.

[D]ECA – Deliverables:

Deliverables are often all that we really think about when planning a job. These are found by tallying up a list of all the tasks necessary to fill a customer’s need. Once this list is built we then have a baseline for attributing a charge for each item along with exemptions for changes in scope or any contractual issues that might arise.

D[E]CA – Exclusions

Always ask the customer: “What doesn’t our work include?”  Project exclusions are rarely talked about until a project is well underway and the customer asks things like:

  • “How come your company can’t manage organizing delivery of all the material that my wife and I supplied for this project”
  • “Isn’t the shed also included in the price? I pointed right at it when you were here going through all costs.” 
  • “Why are you charging me a project management fee on top of the work associated with this change order?”

We need to explicitly state what is out of scope for the project.  This will help manage customer expectations.

DE[C]A – Constraints

All job activities are affected by limiting factors called constraints.  Project constraints are defined by internal or external restrictions that usually revolve around the budget or schedule.  These constraints are imposed by the contractor and client during the initial stages of a job when a bid is being reviewed or a contract is being negotiated.  Some common examples of project constraints are:

  • Ensuring a job’s profit margins can be maintained. Never agree to take on a job or sign a change order without knowing that your company’s bottom line will be met. 
  • Ensuring project schedule milestones meet customer requirements (example: Patio upgrade complete before a family wedding)
  • Ensuring project schedule milestones meet your company’s internal capabilities. We should never make commitments that require our staff to be in three places at once. 

There is a bandwidth of constraints that all jobs should move within for your company to achieve its goals.  How well we can control the upper and lower limits of that bandwidth will determine the level of success your company will reach.

DEC[A] – Assumptions

You might have a client who watches a lot of HGTV or has familiarity working with a much smaller or much larger company.  Their past experiences will cause them to have certain expectations or assumptions which might be different from the services you can provide.  Here are some examples:

  • A customer assumes that you will be onsite with your crew for the whole duration of the job.
  • A customer assumes that you will coordinate use of their building’s freight elevator with the doorman.
  • A sub-contractor assumes they can discuss work scope additions with the client in your absence.

An assumption can be defined as a factor that is perceived to be certain, true or real without any demonstration or proof.  If accuracy of an assumption has a colossal effect on your company’s performance then this assumption should be brought to light and documented.

Transparency is key to running a successful job, managing customer expectations and maintaining visibility as a successful entrepreneur in your industry.  Always remember to go through DECA whenever you are planning out a job or gathering information to perform a service.  High fences make good neighbors so ensure that everything discussed with your customer is clearly outlined in job documentation such as contracts or quotations.

The level of detail to which the communication plan defines the work will help determine how well your company can execute a job and manage the expectations of your customers, so remember to discuss and document each of the 4 DECA components in detail when planning your next project. Click below to download our standardized estimating system with DECA inclusion to get started.

All the best in your year!

Paul Atherton, P.Eng
Business Coach
Breakthrough Academy

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Igor Trninic

Igor Trninic

Igor moved to Canada at a young age, where he learned the value of hard work as he watched his family rebuild a thriving life in a new world with extreme change. Most of Igor’s early learning came from competitive sports, where he learned how to hustle and lead. This learning transferred well to business, when he started running a College Pro Painters franchise at 18 and quickly grew it to one of the top franchises in Canada. After finishing an honours degree in Accounting and HR at the SFU Beedie School of Business, he decided to leave the dull world of numbers and followed his passion of developing people and businesses. He fell in love with leading great people and growing companies to their potential.

Working at College Pro as a General Manager for the franchisor, he tripled the revenue of his division in three years by hiring and leading great managers. Here, Igor saw the power of combining amazing people with strong systems to drive scalability. After College Pro, he chose to test these principles on a new venture with the launch of Shack Shine, and together with the guidance of a highly experienced trades entrepreneur, they grew the company to a full scale franchisor within a year and a half. Shack Shine was eventually acquired by 1-800-GOT-JUNK to be scaled across North America and Igor launched the Breakthrough Academy to guide trades and home service entrepreneurs grow their businesses through proven principles. Igor has a passion and true care for developing people and their businesses, which has formed the foundation of Breakthrough Academy. His work in developing BTA has recently been highlighted in Igor’s Top 30 Under 30 selection by BC Business Magazine.

Igor resides in Vancouver, British Columbia and loves to take on all the adventure that BC can offer. From hunting to skiing to downhill mountain biking, any outdoor adventure is up his alley.

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