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Marketing & Tendering

Marketing & Tendering. Budget Forecasting. Profit is the key to Business Success Profit is amount of money after all expenses Materials Labour Insurances Depreciation. Budgeting. Building Industry may have to ways to Calculate a Profit Accounting Period (Financial Year) Job Basis.

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Marketing & Tendering

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  1. Marketing & Tendering

  2. Budget Forecasting • Profit is the key to Business Success • Profit is amount of money after all expenses • Materials • Labour • Insurances • Depreciation

  3. Budgeting • Building Industry may have to ways to Calculate a Profit • Accounting Period (Financial Year) • Job Basis

  4. Planning for Profit • Turnover – Is the money the company receives in one year • Forecasting Turnover – It is possible to predict when money is likely to be received. • Similarily it is Possible to Fo

  5. Budget Forecasting If we programme the that each claim is 3 Months apart we can forecast the following cash coming in 1 Oct - $13 500 1 Jan - $ 40 500 1 April - $43 500

  6. Items That May affect Profit • Rising Costs – Early this year (2008) concrete reinforcement prices doubled • Bad Weather – 1991 the first 6 months of the year it rained at least 2 days a week • Economic Slow Down – Most Construction requires finance. Banks are reluctant to lend in recessions

  7. Planning to Make a Loss • Expanding the business • Establish a new Branch in a city • Diversifying into new type of building work • Holding onto key staff in down turn

  8. Planning to make a Loss • Large purchases in one accounting period to be used in the next period • This should be planned and done for good financial reasons

  9. Promoting Building Works • Promotional Strategy (P7) • What do you do best • Company Structure • Appropriate methods to attract work

  10. Methods of Promotion • Advertise • Provide Finance • Associations • Tenders • Subcontract to other Builders • Exhibitions

  11. Advertising • Local Newspapers • Radio & TV • Letterboxes • Sign writing on you truck – Aussie Home Loans • Sponsorship • T Shirts • Web Pages

  12. Tenders • Usually prepared from four types of documents • Contract • Specification • Drawings • Bill of Quantities

  13. Contract • Legally binds you and may contain • Conditions • Commencement & Completion Dates • Payment Schedule (so you can forecast a budget) • Defects Liability etc

  14. Specification • Supplement by description working drawings • I.e. Drawings will show bath, Specification will state what type of bath • Pass information that cannot clearly be shown on the drawings. • Will be a contract document

  15. Drawings • Will graphically show the intentions of the designer and may consist of • Floor Plans, Elevations, and sections • Construction details • Engineers details • Services drawings • Very important to keep a drawing register so you know the current drawing

  16. Bill of Quantities • Is a detailed list of every item & every trade usually compiled by a quantity surveyor • Usually not part of the contract

  17. Tendering • Decision to Tender (pp 13) • Can you handle the Job • Can you complete in the time frame • Form of Contract • Is the Client financially sound

  18. Costing the Job • Costing the Bill of Quantities • Calculating rate for Labour and On Costs • On Cost are cost of labour that is not physically related to the work e.g. Workers Comp Superannuation Holiday pay Sick Pay ACERT

  19. Costing The Job • Builders Overhead • Cost that cannot be assigned directly to the Project • Cost incurred by Head Office • Insurances that are not job specific • Calculated as Follows Total Annual Overhead x 100 = % Builder OverheadTotal Annual Turnover 1

  20. Estimating • Examination of the Documents • Contract Conditions • Cross Reference Documents for errors or omissions

  21. Estimating • Tenders require that you visit site • Difficulties in access • Location of services • Site Topography • Protection of adjacent buildings • OH&S Issues both on and adjacent to site • Security

  22. Estimating • Prepare a program • To ensure you can meet the contract date • Cash Flow • Confirm with subbies that they are available

  23. Estimate • Remember you Estimate is not the actual construction cost but a very educated guess • After the actual estimate is compiled • Add Overheads • Add any special allowance • Add allowance for profit

  24. Tendering • The final tender price will be determined by management • Do you really want to do the job • The Client

  25. People Associated with Tendering • Quantity Surveyor • Architect • Consulting Engineer • Consultants • Landscaping • Lighting • Acoustic • Fire Control

  26. Selection of Plant • Outright Purchase • Leasing • Hireing

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