Estimating a job correctly is essential to owning and operating a print business.
Over-estimate, and you risk losing the sale because you’re too expensive. Under-estimate and your bottom line suffers. This is why making sure you hit the bullseye with your estimating is so important — because everyone wins!
How can you ensure a “Goldilocks” estimate every time — one where the clients say yes AND you hit your sales and profit numbers? You follow these five best practices for estimating.
Guessing is for board games and riddles, not for your print estimates.
Estimating is not an area where you want to cut corners and base your figures on assumptions. You either need to ask prospects for the information you need yourself or invest in an estimating solution that will ensure you leave yourself enough margin with every job, big or small.
You can ensure the accuracy of your estimates by taking the time to understand what the project involves.
When you eliminate all of those “ballpark figures” and are able to quote precisely, you’ll be able to decide whether you want to take on the project, determine if you have enough cash to float the project, estimate a completion date, and most importantly, build better client relationships.
“Fast is fine, but accuracy is everything.” – Wyatt Earp
Both you and your clients will be happier if you don’t assume things.
As an expert in print marketing, you understand just how much the complexity level and the variety each unique job can have. Not only can assuming lead to devastating and costly errors, but it can paint your business as arrogant, lazy, or both.
Instead of assuming things because it seems easier, reach out to your clients and prospects to be sure you understand the scope of the project correctly. This will require that you ask questions and clarify any assumptions. It might feel like overkill at the time, but the overcommunication will always work out better for both you and your print buyers.
“Assumptions are the termites of relationships.” – Henry Winkler
In a world where everything is on-demand and consumers can compare prices with a few clicks of a button, it can be easy to continually lower your prices in order to compete.
But, don’t fall for it!
When you disregard your worth and the value you bring to your print buyers by lowering your price, you’ll end up in a race to the bottom and give away all of your profit margins.
There is, however, a difference between undervaluing your services and adapting to the available budget of your prospect.
Be sure to understand the project’s scope in relation to their budget before promising your print buyers the moon. Then, work with them to adapt the scope of the project to fit their budget. This doesn’t mean you devalue your work by lowering your prices. It means you offer the prospect alternate options to bring the price down, such as less expensive materials, etc. (Tip: Focus on being realistic here.)
“A great business at a fair price is superior to a fair business at a great price.” – Charlie Munger
One of the easiest ways to slow down the estimating process is dealing with missing information due to not asking the right questions.
Because you’ll typically be asking the relatively same questions, start compiling your go-to questions so you can have the information you need on hand for each project. Another great way to ask those questions is to add them to your website’s custom estimate or order form.
It’s highly likely that you will have done a job in the past similar to any estimate you need to create. After all, history tends to repeat itself, right?
You can eliminate all of the ambiguity in estimating by referring to previous project reports to get a better understanding of the amount of work, time, and cost that will be involved.
“Asking the right questions takes as much skill as giving the right answers.” – Robert Half
Saying yes to things, printing jobs included, involves risk.
While risk can’t be eliminated, it can be accounted for. If you know you’re dealing with a print job that could be risky, be sure to give yourself and your team enough margin for time, budget, and resources in case anything goes wrong. Having that buffer in place will not only help you financially but mentally as well.
Risk can also be mitigated by double-checking everything to ensure your costs are covered.
Often, seemingly small items such as meetings, changes or edits, and client feedback can cause delays or increase costs. Make sure these types of items don’t get overlooked in your project estimates.
“Trust but verify.” – Ronald Reagan
When you implement these estimating best practices for your print business, you’ll build better relationships with your buyers and reap the benefits of less stress and better profitability.