A lot is riding on the estimating department in a busy print shop. Print estimators are responsible for taking the details the sales team has collected from the customer and quickly turning around a precise estimate that incorporates labor, materials, and outsource costs.
Estimating can be a heavily manual process. With many different manufacturing methods available to produce the job, it’s easy to make mistakes during estimation that impact your profitability.
- If it takes too long to provide an estimate or the price is too high, the customer might jump ship and take their business elsewhere.
- If you try and speed up the process but make a critical calculation error along the way, you get the business but don’t profit from the job.
An estimate is the “make or break” point where a customer decides to choose you – and you get to determine if you want to make money or not. While price is a significant component, so is speed, customer service, resources, and delivery. As experts in the print industry, we are sharing the top 5 print estimating mistakes that are costing your fellow print shops valuable business. From there, we will show you how to fix these mistakes with the right print management technology.
The Cost of Print Estimating Mistakes
As the foundation of your profit management center, estimating is an essential component of your print business. Estimates are used to determine a job’s profitability, distribute resources, secure customers, and reduce risk. If your estimates are on target, you can make strategic decisions that grow your company and increase your profit margins.
The problem is, many printers struggle with speed, accuracy, and control over their estimates. Bottlenecks and mistakes result in grossly inaccurate estimates, which means:
- Missed job opportunities
- Unhappy customers
- Under or overutilized labor
- Inconsistent margins
- Unreliable data and reporting
- Limited growth
The good news is that the damage to your company’s bottom line is avoidable. You need to be aware of the most common estimating mistakes and know how to make the necessary adjustments to fix them.
The Top 5 Print Estimating Mistakes
A print estimator’s job is to determine the true cost of production for a job based on the specifications provided by sales. Estimators are responsible for generating customized quotes with the maximum profit margin at the least cost – while trying to find the highest price the market will accept.
Here are 5 of the most common print estimating mistakes:
- Complex Manual Processes
Print estimates can be complicated when one person is expected to manually account for every variable in all stages of production without a standardized template or procedure. Every job is unique, so every estimate needs to be customizable but still include the same consistent items and costs. When an estimator is forced to rely on manual processes to build estimates, the risk of human error is high and some costs can be missed and timelines can be skewed, which result in profit loss and ultimately, lost customers.
- Underestimating or Overestimating Costs
When you underestimate, you eat into your already tight margins. When you overestimate, you risk losing the job to a competitor. Estimators need to gather all hourly rates, price lists, outsource quotes, mark-ups, and sales prices. Without consistent budgeted hourly rate standards, estimators don’t have the true grasp on the costs, and the resulting margins can be very inconsistent.
- Resource Bottlenecks
Custom estimates take time. When only one or two employees manage all estimates regardless of the complexity, the backlog gets longer and the company is more likely to lose business to someone who is quicker on their feet.
- Unreliable Data
Are your estimators confident in your data? The ability to pull the most accurate production data into your estimates can mean the difference between profit and loss. Without a centralized system to manage equipment specs, production standards, and hourly rates, you’re putting too much stress on your staff and setting your business up for failure.
- Lack of Performance Measurement
There is always an urge to pursue every opportunity to keep your staff busy and have a continuous flow of work coming in the door. However, you should be able to calculate upfront which projects will require more work and less profit, and vice versa. With the right technology, you can see your top customer list, turnover, and actual profit based on product groups, salespeople, periods, etc.
The solution to bottlenecks, manual processes, and inaccurate information is print shop management software. With the right print management information system (MIS), you can successfully avoid all of these print estimating mistakes and set your print shop up for productivity and profitability. You can learn more about print MIS and how it works in the educational white paper below.
Make Estimates Easy, Quick, and Accurate with Print Estimating Software
Print MIS software is built on ending the print estimation bottleneck and reducing errors. By using data from your day-to-day operations, a print MIS can quickly calculate and deliver accurate quotes for different types and sizes of print jobs. By automating key processes and pulling the right calculation data, the software can produce reliable results in a fraction of the time it would take a human estimator to do it.
Here are some of the ways print estimating software can help you save valuable time, money, and reduce (or eliminate) any chance of the print estimating mistakes mentioned above:
- Create pricing consistency through highly-customizable templates and price lists
- Simplify repeat orders by storing all vital details that go into producing a job
- Speed-up the time it takes to generate a quote
- Reduce the chances of losing money on risky jobs
- Provide greater flexibility to customers
- Provide useful insights into “estimated vs. actual” reporting and analysis
- Reduce errors by automatically guiding an estimator through the right path
At Wye Print, we are focused on deploying modern business applications that make estimators better at their job. We offer a cloud-based Print MIS and ERP solution that connects all parts of the printing plant together from sales and estimating through the management of subcontractors and shipping. PrintVis is quick to deploy, easy to use, and designed to fit any size or type of print company. For more information, please contact our team of printing technology pros or click the link below to learn more.