The projects are taking longer than I expected when I submitted pricing.
It seems like every contractor has this sentence at the tip of his tongue when he starts to discuss production. Almost instantly, the conversation turns to crews or people. But are you looking in the right place? Is it possible, even likely, that your problems are rooted in the way you sell, design and estimate your projects? By this I mean:
When landscape contractors are honest with themselves, they admit productivity problems start long before crews lace up their boots. The reason that we’re over hours, or over budget, is because we were under-prepared when we priced the job. When your projects are over budget, you need to look at two questions to discover why. Did your bid cover all of the work required to fulfill the contract? And are your crews following the plan set forth by the estimator, and are they working at expected production rates?
Most time issues are related to one or the other; the crew is too slow, or the estimator was too fast, and sometimes it’s a combination of the two. In any case, you need to find the most common sources of overruns, and remedy them before you start bidding your next project. The good news is that it’s more than likely your problems follow the old 80/20 rule – 80 per cent of the time your crews spend over time budget is because of the 20 per cent of the information your sales team or estimator was missing when estimating. Identify that 20 per cent of missing information, and you will solve 80 per cent of the reasons you’re consistently taking longer than was estimated.
In the landscape maintenance and snow business, most labour overruns can be quickly resolved by allowing the crew supervisors or foremen to access the contracts (prices can be removed if preferred), so they can clearly understand what was included and how much time was allotted for each work area. Contractors complain about their crews’ inefficiency constantly, but when asked how they set expectations, I rarely hear a good answer. A good answer includes work plans for every service contract that clearly indicate the labour, materials, and equipment needed for each service type, and a total of the hours expected for the service. When crew supervisors know what was included in the bid, they can execute accordingly. When you don’t tell them, they guess and it’s madness to think their guess is going to complete the work to the correct standard and achieve the anticipated profit. They might get one or the other right, but not both. You will almost certainly have a problem; either the customer is under served and you lose the contract, or your customer is over-served and you don’t make any money – sound familiar?
Fix the problem by taking more time before you price the job to analyze site information. You should have a standard process or form for this. Understand the scope of work and the needs of your clients fully – prompt them with a list of standard questions; they’re not the experts. This process ultimately gives an accurate estimate for the client, and then is used to manage work in the field. When the estimate covers all of the work needed, and the crew understands the scope, as well as the labour, material, and equipment planned into the contract price, it can execute. Provide the crew with a post-service quality checklist, and you have all the ingredients you need for productive, profitable execution.
That’s not to say you’ll never have problems, but when you do, your problems will surface much earlier. If the services are consistently taking too long, you’ll know after only a few weeks, rather than finding out after a few months or worse, at the end of the year. If a crew has been given unrealistic timelines, then members will call attention to the problem, and you can proceed to find out why timelines aren’t being met. It could be the crew has misunderstood the level of service required, or it is inefficient, or maybe the estimator underestimated the time the job was going to require. Make it a priority of finding out why you’re going over time, and add that reason to the 20 per cent of problems you’re going to solve with better information gathering in the sales/estimate phase.
In the landscape construction business, I believe problems start long before the project hits the estimator. In my experience, the design phase of a project has an enormous impact on profitability. In design/build projects, landscape contractors have a lot of control and flexibility. Done properly, your design can value-engineer the work to ensure a profit. Done improperly, a design with incomplete information will ensure the opposite; that your work goes out underpriced, and you’ll consistently fail to achieve the profit you deserve.
Now you can hope to find or hire good designers/salespersons/estimators who just ‘get it,’ but hoping that my designers/estimators just ‘got it’ has cost me more money than I care to count. Depending on finding capable people is, at best, rare and probably even unrealistic. Instead, create a consistent, repeatable design process that prompts your sales/design/estimation staff to gather the information they need, ensuring the job is value-engineered when it’s designed, then estimated and priced accurately. This process should be a form that’s several pages long – design/build work is not simple – but 30-60 extra minutes studying the job upfront will save your company hundreds, even thousands, of hours doing free work on jobs that weren’t completely analyzed before a price was assigned.
The form will also help you get better. As new problems come up, the questions you need to fix them can be added to your form. Your form becomes a living document that gets smarter with experience, and it only takes minutes to update a form – well worth the time invested.
If you build projects designed by others, then you need to analyze the drawings and specifications even more carefully. In my business, the most costly mistakes that we’ve encountered have come on projects that we didn’t design, and usually resulted from information we didn’t have when we priced the job – but we priced it anyway and hoped for the best. When ‘the best’ turns out to be ‘the worst,’ it can turn a good job into a nightmare for the contractor, the designer, and the customer, as everyone looks to protect themselves from the effects of changes. Just some of the things you should be looking at include:
These are just some of the many, many questions that need to be answered in order to ensure your profitability. If you’re lacking a standardized process for gathering information before you price work, then the problems with your job times start long before your crews ever park in front of a site.