Polishing the Crystal Ball

Courtesy Wikimedia Commons.

 

Few people enjoy cost estimating and pricing exercises. I have blogged about this topic before but thought it was worthy of another look because of the situation described in the last posting.

I was tempted to say “no one” rather than “few” in my opening sentence but hate to start out with an obvious overstatement; once you get organized quoting projects can be a rewarding intellectual, technical, and commercial activity. The problem seems to be that few organizations take quoting seriously.

We would all like to keep our jobs; setting prices and selecting projects involves taking risks that might make other decision makers unhappy. If no one quotes new projects, however, all jobs are in danger. Responding to inquiries is as much a part of day-to-day business as unlocking the front door and turning on the lights.

I do not want to be too harsh on the firms that e-mailed their disinterest in my project within hours of receiving it. They had their reasons for doing so and a quick “no” is much more professional that a “no quote” after the bids close.

There is also nothing wrong with asking for more time to quote or requesting a “target price.” Some jobs may actually be too big, too small, or too complicated for your organization and it helps the potential customer to know that. You also get “credit” for directing the inquirer to other suppliers who might be a better fit.

It is unreasonable to put all the quoting responsibility on one person. Even owner/operators need a second or third set of eyes looking at opportunities. A well defined set of ground rules and procedures will save second guessing later. One of those procedures should be a comparison of estimated to cost to final “out the door” costs so the methodology can be adjusted.

You do not have to be a seer to quote projects. There are many methods that work far more effectively.

About Charles D. Schultz 590 Articles
Charles D. Schultz is President of Beyta Gear Service and one of Gear Technology's technical editors.

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