Terry Morrill
Description
When my company, Pacific Outdoor Living, began to grow to the point where we had 6 or 7 jobs going simultaneously, I lost track of whether I was makin
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g money.
I found this was not an isolated problem; many contractors suffered from the same fate. There was no software program, estimating system, or any kind of solution that could tell me if I was making money. This book is about how I solved those problems and developed systems, procedures, and a remarkable software that lets anyone know at the end of each day how much money they made that day.
Today, I'm not talking about tracking 6 or 7 jobs but 60 to 70, and the system still works. I followed a series of clues that led me to uncover some very illogical ways contractors have been doing business forever.
This book exposes the fallacies and dangers of using and relying on the two basic methods used to estimate construction jobs today: the unit price and markup methods. Both those methods give wrong answers. The book offers an alternative method that gives the right answers: The Gross Profit Estimating System, using the AIMM Calculators, which not only gives the right answer but also answers the question at the end of each day, "Am I Making Money?" (AIMM).
Contractors sell labor hours, not units of products. To be successful, they need systems and procedures that do three things: provide accurate man-hours needed for the job along with material costs; use a formula to calculate the correct price based on these hours and material costs rather than adding a percentage, which leads to incorrect pricing as shown in the book; and compare the estimated hours with the actual hours worked. These steps ensure accurate estimates and better financial outcomes.
This approach ensures that profitable opportunities are not lost to competitors and prevents the acceptance of unprofitable jobs that should be avoided. By moving away from unreliable bidding methods and embracing accurate estimating, contractors can significantly improve their financial stability and overall success. Accurate estimation is crucial for maintaining a profitable and sustainable business, reducing the risks of financial missteps, and ensuring long-term growth and prosperity in the competitive construction industry.
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