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 Progress Claim No1 Value of Works To Date (10%) $ 15,000.00 Less Previous Claims $ - Less Retention $ 1,500.00 Value Progress Claim 1 $ 13,500.00 Progress Claim No2 Value of Works To Date (40%) $ 60,000.00 Less Previous Claims $ - Value Progress Claim 1 $ 13,500.00 Less Retention $ 6,000.00 Value Progress Claim 2 $ 40,500.00 Progress Claim No3 Value of Works To Date (70%) $ 105,000.00 Less Previous Claims $ - Value Progress Claim 1 $ 13,500.00 Value Progress Claim 2 $ 40,500.00 Less Retention $ 7,500.00 Value Progress Claim 3 $ 43,500.00 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 Overhead Total 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