KEY TO SUCCESS

Company: Artcraft Advertising  Project: Do it yourself estimating software

Key to success: Make sure to take every detail of a project into account and charge accordingly.

There are lots of fantastic estimating programs on the market for graphic printers and fabricators. Some of them are designed specifically for our industry and some are modified versions of generic estimating software. For some companies, such as a large outdoor sign shop with many estimators and lots of product variations, for example, a major estimating package is mandatory. It enforces standards, minimizes errors and ensures uniformity.

But what about the little guys? They often need some estimating help as well. It’s easy to forget some items when you’re doing a quote in a rush or overtired. And mistakes can be costly. The off-the-shelf software packages are a fantastic value, and can save the medium-to-large shop thousands of dollars in revenue. But sometimes those packages are more complicated than a small shop requires. Still, smaller shops should have an affordable job estimating option that goes beyond just digging in with a pencil and calculator. 

This spreadsheet shows what the formulas look like.

This is what the completed spreadsheet will look like.

DO IT YOURSELF

No problem—its do-it-yourself (DIY) time! To start, you’ll need a basic spreadsheet package like Excel or Lotus. Open Office also offers a free version that is excellent (www.openoffice.org). Quoting basically involves two categories of expenses required for the job—shop labor and purchases of goods and services. So each quotation is essentially two separate parts that come together in the end.

The following is a guide to creating a basic spreadsheet that will serve as a reminder not to forget anything as well as an instant math machine to do all of the calculations. More complicated functions can easily be added as you discover what your preferences and requirements are. 

LABOR

Lets start with the labor portion of the equation. Begin by putting the names of your columns across the top of the spreadsheet as shown on the next page (Item, Hourly Rate, Hours, Value and Notes). In the left-hand column under Item, enter all of the tasks that your shop might perform. I’ve got a few shown. Don’t get too picky with detailed breakdowns of jobs—keep it simple with as few categories as you can get away with while still keeping an accurate quote. It’s also a good idea to list them in the order that they are performed during the completion of the project. 

The next column is for hourly rates. Each task can have its own rate. Column C is where you enter the estimated hours for each task in the project you are quoting. Column D does the calculations. In this case we start with the “=” sign and add the cell identification for Hourly Rate, C4. We want to multiply this by the number of hours estimated, so the next symbol is “multiply” (the “*” sign), followed by the cell ID for Hours, D4. This will automatically multiply the two numbers and return the answer in the cell. Then select the top cell in the list and the bottom cell while holding down the shift key. Press Control D and this will fill the formula down the entire list. The last column is for notes to remind yourself what the process involved. In this example, scanning is of 2-4"x5" transparencies. At the bottom of the Value column you will want a total cost. The formula for this is =SUM(ID of the first cell in the list:ID of the last cell in the list). So in this example it is =SUM (D3:D16).

MATERIALS

The second part of the spreadsheet is for materials used, sub-contract services and freight (this includes freight-in to bring in materials required for the job as well as freight-out to the client for proofs and finished product). The first column again begins with Item and lists the goods and services commonly used. Best practices here would be to list the goods in the same order as the associated labor tasks. Listing each product variation would be counter productive as the spreadsheet would get too complicated. It is best to just list each type of product, then add the product details into the Notes section.

The next column is Unit Cost. If a shop works from limited inventory, this could be pre-entered. More likely, it will have to be entered for each quote because of the large possible numbers of inventory items. A second database to retrieve the information from will be handy here (more on this later). Units Used follows this heading. These items would be entered for each quote based on the quoters’ calculations. The Unit Cost is multiplied by the Units Used using the same formula as in the previously mentioned Labor section. Then this column is totaled, again using the same formula as the Labor section. However, this only gives the cost price of the goods. The next row will calculate the shop mark-up by multiplying the materials sub-total cell times the mark-up rate (in this case =D31*20%). The last row in this section adds the mark-up and the materials sub-total together.

TOTALS 

To finish it all off, at the bottom of the spreadsheet we add the Total Labor and the Total Materials (=D17+D33). That gives us a basic spreadsheet to get started. There are, however, a couple of other additions that can greatly enhance the spreadsheet’s usability. 

The boss knows all of the information intuitively that is needed to fill in the quote. But what if someone more junior is trying their hand at estimating? So the first addendum involves adding another column on the right side to supply basic quoting information to help everyone stay consistent. This information would include how long it should take to perform each task, rated per task units (eg. 1 saw cut= 1 minute) and what the costs of goods are for various products. Each row would have a notation (see Chart 1.)

INVENTORY PRICING

Last but not least, we have the inventory pricing spreadsheet. Every time the person responsible for purchasing buys something, they could enter it into this simple spreadsheet. It would only take a couple of extra minutes. Then when someone wants to know the cost of an inventory item, they can just go to this spreadsheet and do a “find” for the item. Accurate pricing is available in seconds. It could look something like this Chart 2. 

No business is too small not to have easy and consistent quotations for every occasion. Take a few minutes to try something out for yourself, whether it’s an off-the-shelf package (many have free trial versions) or a DIY project, it will be worth the effort. A little time spent now will save a lot later.

Business Management Software Packages

There are many advantages to integrating a commercial estimating software package. Manual estimates can be tricky on more complex jobs because there are a number of processes that can come into play in a given signage project. In addition to cost tracking, good estimating software packages often offer archiving capabilities for future reference/comparisons; they offer flexibility on any given process allowing for different sizes, substrates, etc.; they may feature automatic price break calculations for quantities ordered, and price breaks can be configured many different ways; also they can provide multiple estimates on different quantities or products in one quote. Worth checking out.