Ben Hudachek on Strategic Estimation for Millwork Success

Today's episode of Verify In Field: The Millwork Podcast is all about millwork estimating with Ben Hudachek from BH Estimating. We'll chat about hit rate optimization, winning bids with trust, and some insider tips for subcontractors on bid day. Get ready to level up your estimating game and make smarter bid decisions. Let's dive in and verify in field!

Ben Hudachek has been providing estimating and consulting services for companies for many years. While the services offered by his company have remained consistent, there has been an uptick in the need for training and consulting. In response to this, Ben has developed a training program to help companies properly train new estimators and ensure they have the necessary skills for the job. This program has been well-received by companies who either lack the time or expertise to train their estimators effectively. As a result, Ben has seen his business expand to meet this growing demand for training and consulting services in the industry.

Watch Ben's first time on the podcast here:

00:00 Introduction: The Pricing Dilemma in Millwork
01:00 Welcome Back: Guest Introduction
01:45 BH Estimating: Services and Industry Trends
02:44 The Growing Need for Training and Consulting
03:29 Challenges in the Estimating Department
06:58 Hit Rate Optimization: An Overview
10:24 Step 1: Tracking Past Bid Performance
12:05 Step 2: Analyzing Hit Rate Data
13:42 Step 3: Being Selective with Bidding
17:34 Step 4: Improving Your Marketing
23:59 The Importance of Solving Problems for Contractors
24:24 Case Study: Handling Miscellaneous Subcontracts
26:00 Understanding the Bid Day Process
28:38 Building Trust with Contractors
32:31 Effective Proposal Presentation Tips
38:41 Balancing Project Sizes and Growth
42:17 Investing in Estimating Departments
46:06 Conclusion and Contact Information

https://duckworksmw.com/podcast/ben-hudachek-on-strategic-estimation-for-millwork-success

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Transcript

Jacob Edmond: 0:00

Every conference I go to is millwork owners and leaders talking about this of like, Oh man, how do we get, how do we get to where we can charge more in it? Uh, so many of them honestly will say like, Hey, we're doing it to ourselves because we're competing with each other and we're all forcing the price down by offering that. And I think one of the, one of the worst things that can happen is you win one of those jobs that you. bid low, right? and then you have to deliver it, uh, and you're just going to lose your money. And then you've set the expectation that you're the cheap guy. Um, and so it's hard to come back from that. Welcome back everybody to verify and field. Uh, today I have Ben Hudacheck from BH estimating, uh, which is, he's now a two time guest. This is the second time we had him on early last year, I think. Um, so I will, I'll link it here in the show notes also for anybody that wants to go back and listen to episode one, where he talks about, um, the services and his journey into where you're at today, um, today we're going to talk a little bit about, um, BHS matings, HRO, their hit rate, optimization process, and how they help their clients with, um, optimizing their hit rate and discussing the industry trends since we last talked and just having a fun conversation. So thanks for joining Ben.

Ben Hudachek: 1:42

Yeah, Jacob. Thanks for having me on. It's an honor to be here.

Jacob Edmond: 1:45

Um, so maybe to get started for those who haven't listened to your first episode, um, uh, would you maybe give just a brief background and kind of what, what you do today? what BH estimating does.

Ben Hudachek: 1:58

Yeah. So BH estimating, we focus, um, strictly on millwork, uh, millwork estimating. So we have estimating services where we'll do estimating for companies on a job by job basis, um, as they need it. We also provide training in the area of estimating, and we also do consulting for strictly focused on the estimating department. So those are kind of our three main services.

Jacob Edmond: 2:25

Awesome. And, uh, since we, we last talked, um, has anything, you know, changed in, or the, any developments you've noticed in the industry or things that you've been working on at BH estimating with your clients?

Ben Hudachek: 2:38

Yeah, I mean, nothing, nothing major has changed, I would say. Um, we still do the same services. I guess I have seen a little bit of an uptick in the need for training and consulting. Um, we still do a lot of estimating for companies, but definitely over this past year, I've just seen a greater need in the area of training. You know, there's a lot of companies that, um, you know, they either hire an estimator and just don't have the time to train them, or they need to bring someone from another company. the company and put them in the estimating position and either don't have the know how to train very well, or they just don't have the time, you know, to, to take the time that it takes to train someone. So we have a training program that we, that we run through with, with estimators. Um, we've seen it be really effective and really helpful for companies. Um, yeah. And then also just the need for consulting in the area of estimating. Uh, I think it's kind of one of those, Often overlooked areas in a company. Um, I mean, as you probably know this, Jacob, when you're running any sort of business, you kind of tend to, to focus on the areas of most urgency, put out the fires that need to be put out. And, um, the estimating department in a, in a good way is less dramatic of a department I've found, um, less problems flare up, you know, problems tend to flare up when you're. on a project trying to install the deadlines come in. You're not going to get done. So you tend to focus on those areas of greater urgency. Um, and so I think oftentimes we can overlook the estimating side of things. And so, but there's tremendous potential there and really optimizing the estimating department, getting it up and running like a well oiled machine. There's, there's a lot of growth that can happen by focusing on the estimating department. So yeah, we've just seen a lot more of that. People recognizing that need. Um, for growth in this area and optimization in the estimating department and being willing to, to invest in that department. So,

Jacob Edmond: 4:35

And I would imagine those, you know, the, the need for training, the need for, you know, people onboarding new estimators and optimizing the department at all seems to be. You know a symptom of just industry growth in general a lot of companies are Growing or selling more or seeing more opportunities, you know, I know for from us on the drafting side we've seen especially the last I don't know three four months beginning half of this year as a lot of Clients landing a lot of work um And you know, obviously before that comes the estimating and the sales and stuff So in general, you know, it seems like the industry at least here in the u. s You Seems to be picking up and there's a lot of, a lot of work to be had, right?

Ben Hudachek: 5:14

yeah, definitely. And then combine that with the kind of labor shortage, um, you kind of have that compounding problem of like, okay, we have this growth. Mm hmm. We need people to be able to do this work. Where do we find them? And, uh, I mean, I read a statistic, I think it was like something like 3 million adults were thrust into, uh, early retirement due to COVID. So like, there's all these people that have retired, you know, and with that goes all this knowledge and this experience that they carried with them. So we have this kind of gap that we have to fill and, uh,

Jacob Edmond: 5:48

And I think probably more so in our industry, which trends towards, you know, older career or later career individuals are in our industry. There's not a lot of younger people. So as those people hit retirement, um, you know, it's a bigger impact, I think, to our industry.

Ben Hudachek: 6:05

Yeah, definitely, definitely.

Jacob Edmond: 6:07

Well, you talked about, so you help with training, you help with, um, consulting and in the consulting, you help kind of like you, you described making the estimating department run like a well old machine. And I think a lot of times, um, I imagine you find, you know, people may be apprehensive about bringing somebody from the outside, particularly in estimating. That seems to be like, you know, people will outsource drawings or outsource fabrication or outsource install. But, um, you know, Like estimating am I estimating data a lot of people hold that very close and they're very apprehensive about letting somebody in like that's their secret sauce, but um, it's also probably The department that has the least amount of resources and least amount of capacity to spend time optimizing and getting outside perspective on like how can we improve the process, but Yields probably the most results from optimizing, wouldn't you say? So you talk, we're going to talk about today, your, your hit rate optimization process, and I imagine that's very much focused on the optimization kind of making the department run like an old, well, old machine. Can you talk a little bit about that specifically, the hit rate optimization and how that, how that yields and helps you, um, refine the department as a whole?

Ben Hudachek: 7:21

Yeah, for sure. So like we mentioned earlier, growth, you know, it's been a lot of growth and growth is good. Like we always want to be growing, but with that growth comes a lot of problems. Problems are revealed, bottlenecks are revealed, right? So as business owners, as business leaders, like we're constantly trying to. run around tweaking things, uh, getting those bottlenecks relieved. And so our HRO or hit rate optimization is one of those tweaks that we can make. It's definitely not a silver bullet, fix everything, but it's one thing that we can do to, to bring about improvement in the estimating department. And the idea is simple. The idea is, you know, we have our hit rate, right? So the number of projects that we are awarded versus the number of projects that we bid on. So if we bid on a hundred projects and we're awarded 10 of them. We have a 10 percent hit rate. And while there are a lot of factors that go into that hit rate, um, I think it's one of those things that we often use as an indicator, like we can look at our hit rate and monitor our hit rate. And we need to do that. It's a good indicator to, to see the health of our business, especially our estimating. And when we can kind of hone in on that and focus on that and really try and actively try and improve that hit rate. Uh, we can bring about a lot of, of growth. And so the idea is that, um, we can, our estimators can be more efficient with their time, right? If you think about it, if your estimating department is bidding on a hundred million dollars worth of work a year, you have a 10 percent hit rate, let's say, um, you're being awarded 10 million dollars per year. If you improve that hit rate, even just by a couple percentage points, up to 12%, You're still bidding on 100, 000, 000 worth of work a year. You're going to be awarded 12, 000, 000 worth of work. So there's a 2, 000, 000 difference even just in that 2 percent hit rate improvement. And so it can, it can bring about a lot of change. Your estimators didn't have to bid on any more work. Um, didn't have to work overtime. You didn't have to bring on any estimators. You just strictly improved the percentage of your award and your award rate. And so, uh, now we do have to be careful with that. Because if we. Use a simplistic approach. Like let's just lower our prices and we'll win more work. You probably will win more work, but it's not going to be as profitable. So we want to avoid like a simplistic approach like that. So our approach is we just have four steps that we look at four different areas that we look at to, um, to try and actively improve our hit rate. So the four steps that we use are just the first one is tracking your past bid performance. Um, the second one is analyzing your hit rate data. The third is just being more selective with what you bid on and the fourth is really looking at your marketing, your messaging. Between those four steps we can, we can improve our hit rate in a healthy way, the way that's going to bring in more work, more profitable work, and uh, with, you know, the same amount of effort in our estimating department. So jumping back into number one, just tracking your past bid performance. That's the first step, like we really just start need to, we need to start just keeping track of of the projects that we're bidding on. And most companies are already doing that, keeping track of the bids, which ones are awarded, which ones are not, uh, which ones are still pending, and using that to kind of follow up, talk to the contractors, find out where we're at, and uh, and then, even when they have lost the project, to find out some information, like how much did we lose by, or who was awarded the millwork, and that kind of thing. We encourage people to go a little bit deeper, even in that tracking that data. So really keeping track of a lot of different parameters on a project, more than just, uh, the name of the project and the price of your bid. So we encourage to keep track of, of a lot of different parameters. Like what kind of cabinets it was, what kind of countertops it was, was there a wall paneling, what kind of wall paneling was it, was there trim, was it paint grade, was it stain grade? It was the project AWI certified and all those different parameters, when we keep track of that, it gives us a lot more information because, um, it's a little bit of work up front, like keeping track of it. But if you get in a healthy habit of just tracking all those bits, um, we actually have a dashboard available on our website for people if they want to download, it's free. Um, it's really helpful. It's just an Excel spreadsheet. Um, the, if you go to bh estimating. com slash dashboard, you can download that dashboard. And so. So, you know, it's just an Excel spreadsheet, nothing fancy, but it helps you keep track of all those parameters on a project. Um, and then we have a dashboard that you can kind of toggle the different, different key areas and you can start to analyze that data. So it brings us to like step number two is really analyzing that, um, hit rate data. So kind of delving in a little bit deeper. So, okay, we have our 10 percent hit rate or 12 percent or 15%. and really diving into that. And we can start to look for trends when we really analyze that data. We can look for, for trans, like what's, what's bringing our hit rate down. Like, is there a certain type of project? Is there a certain contractor that we're bidding with that we're just not winning much of their work? Uh, we can start to look for those trends. Um, one example is a company we worked with. We noticed when we started keeping track of their bids, really analyzing that data with them. We noticed that they were, it was really skewed projects that had a lot of wall paneling. They were losing more often than projects that did not. Um, so by analyzing that data, we, it points us in the right direction. Like we can know where to look, where to focus in on. And so we looked at their wall paneling and, um, we just realized that their pricing was just extremely high on their wall paneling. They had a very efficient shop. They did, they did great on projects that had a lot of wall paneling. It's just their pricing was, was really high. So we did end up tweaking that pricing a little bit, and that was able to bring their hit rate up, especially on projects that had, um, wall paneling. So if you're keeping track of your past bids and really analyzing that data, that can give us a lot of information, and we can really use that information to make more informed decisions. Um, You know, keep a track of your bids doesn't give you the answer, but it points you in the right direction to look at. And we can really hone in on those areas. Um, and then the third step is just being more selective with your bidding. We always encourage people like, don't just bid on everything. Um, I know that we get, often get overwhelmed with bid invitations as millwork companies. Um, especially if you're a good millwork company, you're going to get a lot of invitations. too many invitations than you can handle. And so, uh, we really want to be selective. And so if we're keeping track of those past bids, and then we also can look at projects that we've completed in the past and which ones were really good fits for our company. What, what fit really well in our wheelhouse, right? Like we're really good at this type of cabinet, this type of project. And what we can start to do is really hone in and actively seek out that kind of project. And, um, and focus on those and prioritize those. So it's not to say that we don't bid on the type of projects that we don't like necessarily. Um, but when we're being more selective, we can prioritize those projects that really fit well in our wheelhouse. And that goes a long way in, um, in improving our hit rate and improving our company across the board. You know, if we're, if we're bringing in projects that are not good fits for our company, like it's going to cause a lot of problems. down the entire chain all the way through. Um, but if we're bringing in projects that are really good projects, good fits for our company, um, then it's, it can bring a lot of, uh, growth. It can bring a lot of profitability all the way through the chain. Uh, so yeah, it's just being really selective with your bidding and doing it in a healthy way. It's, it's hard. I know it's hard to turn bids down. It's really is. It's hard to say no. And especially when it's You know, you know, the contractor and he's your buddy and he's calling you up and can you bid on it, please, please. But if it's really not, not a good fit, like you have to learn how to say no, you can say no graciously. Um, but we do have to learn to be more selective. We have to look at every bid as, as an investment, right? We're investing our time. Our estimates are spending time and spending time and effort on every single one of those bids. And so just like with any investment, we need to calculate the risk, right? And so if we know which projects. Are a really good fit for our company and we can prioritize those. We know that the risk is less And that it's a better investment of our time and our resources So yeah, so in order to do that in order to really set up your wheelhouse and know what's a good fit You mean you need to keep track of your projects You need to keep track of the projects that you've actually been awarded and which ones went really well Which ones didn't go so well and then of course diving into the the problems of like, well, why didn't it go well? Was it the type of project? Was it an internal issue? What was that problem? But, um, really building that wheelhouse and really knowing what fits well for your company. Um, this is something that we work with too, with our companies that we work with is really kind of honing in on that. Like what is, what is a good project for you? It's different for each company. You know, each company has their own niche. Each company has their own specialties. And, uh, and we can really help just kind of hone in on that and really develop that and flesh that out so that we can, when we're bombarded with those bid invitations, we know those key points that we're looking for, the key types of projects, the key contractors that we like to work with and that work really well with our company, key locations, the scope of work, um, all those different parameters. We can sort through the bid invitations and. and turn the ones down that we don't want with more confidence. And we can really invest and bid on the ones that we do want with more confidence when we have those in more, when we have the more information to make those more informed decisions. So, uh, yeah. And the, the fourth point is just improving your marketing. So I know that we, especially as companies, um, tend to kind of go with the grassroots marketing, uh, word of mouth. Which is, which is great. Um, and I think that we often don't even necessarily associate estimating with marketing. But what I've found is with a lot of smaller millwork companies, like they don't have a marketing department, they may hire outsource, uh, a marketer, but estimating really is on the front end of the business, right? Like usually the estimating department is the first point of contact for a project for a new contractor, um, even. The owners of the projects themselves. And so, uh, it's really a great place to, to really hone in our messaging. Like, how are we talking about our company? How are we portraying ourselves? Um, so it's often something that we don't think too much about, but like we live in a digital age, like everybody's checking out your website. Like, I know we necessarily don't think about it too much. Like sometimes we just slap together a website and put it up there. But, um, Everybody's reading it, you know, and you better believe those contractors that have never heard of you. Like they're Google searching you, right? And you're going to check out your website. And so what's on your website? Like, is it effective? Is it, are you really, is your messaging like clear? Is it concise? And does it really portray like who you are as a company and really kind of, um, honing in on that messaging? Oftentimes we, we tend to think that like the biggest factor that a contractor is looking for. on a project is just the price. And so we're really like fighting to bring our price down, bring our price down and just be the lowest bidder so that we can be awarded the project. And, um, that's often just not the case. Like smart contractors aren't necessarily looking for the lowest bidder. I mean, there are certain types of projects where they're required to take the lowest bidder and that kind of thing, but, but in general, like good contractors are looking for so much more than just the lowest price. And really it comes down to the number one thing is trust. Like, do they trust you as a company? Can you get the job done or is it going to be a complete flop? And ultimately the contractor is, is looking out for their own reputation. You know, they're the face of like, they're speaking to the owners. And if the project fails, it's on them, right? So they don't want to bring on a millwork company that's That's going to be a flop, we're going to be a failure. So ultimately they have to know that they can trust you and trust goes way further even than price. Um, and so I think you had a couple of past, uh, episodes where you guys were talking about pricing and just the importance of not necessarily being the lowest price, but actually charging what you're worth and

Jacob Edmond: 20:24

hmm.

Ben Hudachek: 20:25

charging well. And, um, yeah. So I think that goes a long way and really. Making sure that your company is profitable and not getting into that rat race, the race to the bottom, right? Cause, cause that's what it is when you start trying to compete strictly on price. It's a race to the bottom and nobody wins that race ultimately. So, uh, yeah. Oh, go ahead.

Jacob Edmond: 20:48

No, no. I think that's great. I mean, I've, I've, you know, every conference I go to is millwork owners and leaders talking about this of like, Oh man, how do we get, how do we get to where we can charge more in it? Uh, so many of them honestly will say like, Hey, we're doing it to ourselves because we're competing with each other and we're all forcing the price down by offering that. And I think one of the, one of the worst things that can happen is you win one of those jobs that you. bid low, right? and then you have to deliver it, uh, and you're just going to lose your money. And then you've set the expectation that you're the cheap guy. Um, and so it's hard to come back from that. But I think, um, I really liked the, the four, four aspects of your strategy that you outlined. And ultimately what it sounds like kind of in summary is your hit rate optimization is, is, kind of maximizing the, the effectiveness. Of your efforts in estimating, you know, you know, I think a lot of times people focus on efficiency And they lose sight of effectiveness And it seems like what you're focusing on here is how do we make all of our efforts as effective as possible? and not Not how do we just bid more work because I think that's easy is like, oh, well, I want to win more work Let me bid more work. Let me hire more estimators But if that's not an option or you don't like, Hey, I don't think that that's what I need. How do I become more effective at the work we do bid? And it sounds like it starts with just looking at your history, looking at your the information you already have, tracking it better so that you can see trends, like you said. Um, and then we're finding from there.

Ben Hudachek: 22:24

hmm. Yeah, and another thing with the marketing is really, is, is more of just your messaging, too, even more so than, um, you know, creating good looking business cards or having a good looking website. But, but, um, Really, when you, when you find your niche in your wheelhouse, like you have something to go off of, right? You have a specialty and when you can really portray that specialty and really speak to that specialty, um, like ultimately contractors, like you have to put yourself in the place of a contractor, right? And on bid day, it's chaos, right? They're probably getting hundreds of proposals in from all the different trades and they have to sort through it and they have to decide on which ones to use. And What goes into that decision, you know, ultimately it comes down to trust and, and if they know that you're going to come through, they're more likely to put your number on that proposal, even if it's not the lowest one. And, um, yeah, and it's also, you know, like what I've, one thing that I've seen, and this is not to be critical, but I've seen a lot of websites from the work companies. Um, and. Frankly, most of them are just not very effective as a website. Like your website should be, should be a selling tool. Like it's a, it's marketing collateral, right? Uh, oftentimes what, what I've seen is most of the time we focus on either the story of the company, you know, you know, such and such millwork was started in 1968 by my grandfather and his brother, Billy. And they did the work out of their garage, which is great. Like we should tell our story, but it's not necessarily an effective means of. Of, uh, communicating the message of your company. Well, and, and I, I, what I've found is just, if we can be a solution to a problem that goes such a long way, like contractors, like I said, the day is chaos, right? And what they want is they want someone who's going to ease that chaos. They want someone who's going to solve a problem. And so if you can clearly communicate what that problem is and how you can solve it, that goes a long way. Yeah. We have a company that we worked with. Um, And they, they, pick up like a lot of those, like they specialize in picking up all this little miscellaneous subcontracts that are loosely associated with Millwork, you know, all the decorative metal, all the, uh, glass, all the countertops, and even like additional items that aren't associated with Millwork, but they just, they pick up all of those subcontracts and they include it in their price. So they're the ones that are dealing with all the little tiny subcontracts. And they use that as a selling point. Like they, they present that to the contractors and, and that goes a long way, right? Like if you can approach a contractor and say like, You know, all those little subcontracts that you can't stand dealing with, like we handle all that. Like we deal with all of them. We include them in our price so that you don't have to worry about it. You can focus on the other areas and really make your project a success and win the day with your project. You don't get caught up with dealing with all these little subcontractors. That goes a long way, you know, and it also gives you something to, to talk about when you're at those awkward subcontractor luncheons, you know, and you're rubbing shoulders with the project managers and they're like, well, who are you, you know, who are you with? And instead of just kind of an awkward, like, oh, I'm with such and such company and, you know, the company we started in 1986 and la da da da da, you can really have something that's like an effective way of communicating who you are and what you do. And that goes a long way. Yeah,

Jacob Edmond: 26:00

those of our listeners who maybe aren't familiar with from the GC side, what that bid day looks like, like what is, what is it they're doing? Cause I think there's probably people in estimating in the workshops today that don't really understand from the client side. I think that's important to understand. Because just like you said, like the real thing that all of us are doing is solving a problem for our clients. And if we're doing that more effectively than the next guy, whether that be by price or service or quality or schedule or whatever it is, it's how can, how can you solve a problem and do it in a way that makes it easier for the GC to say yes to you than the other guy, you know, that's really what it comes down to. And so. Can you explain a little bit about what what that looks like what is happening on a bid day for a GC? And you know, they're collecting all these vendor bids and things like that or subs but Um, can you walk us through that process and like why? How that understanding that and how like as a ill worker as a subcontractor we can Um kind of make that go more smoothly

Ben Hudachek: 26:58

yeah, for sure. And mostly it's just like finding out from your contractors, from your customers, like what is important to them. Um, but yeah, the bid day, like it can be crazy, you know, like they do as much work as they can. They've, they've spent the last few weeks or months like really preparing. Yeah. Yeah. preparing their bid sheets, like getting ready, speaking with subcontractors, making sure that they, they understand the projects and making sure that you're all on the same page as far as scope, uh, and materials and, you know, the different breakdowns that they want to see on the pricing. So there's a lot of preparation work, but, um, you know, most companies like they're down to the wire. So they're submitting their. You know, I'm talking about subcontractors here that we're submitting our pricing at the last minute We try and give as much notice as possible Give it to the contractors as early as possible But for the most part the day of the bid like they're getting all of these proposals in from all the you know, all the different divisions, right? And so they have to sort through those and they have to to know like you get the random Proposals in from such and such millwork that they've never even heard of and their price is ridiculously low. Do you include it? You know, do they have everything like there's not enough time I mean you may have time for a quick phone call But there's not necessarily the time to really run through the entire project and make sure that they have everything included Make sure that they're pricing the right materials and that they're factoring all the different factors into the project Um, so you just have to make a quick decision, you have to decide like, are we going to use their low price? It's tempting because it's low and we could have a competitive advantage, but I don't know this company or we've done minimal work with them. Um, and so there again, it comes down to that trust factor. And if, if price is not your biggest factor in a particular project, smart contractors will choose the company that, that they know will get the job done. They know that they can trust. They have a good. history of their, their proposals, their bids being, being, good, being full, they've included everything. They've thought it through. They've even included the things that weren't shown in the plans, but they know are going to need to be included, you know? So if there's a company that they're familiar with, that they understand what they do, and that a millwork company brings some specialty to the table, like if there's a company, a millwork company that really specializes in hospitals. Um, and they're bidding on a hospital job. Like they're more likely to lean towards that, that millwork company because they have a specialty in that area and they know that they're going to bring not only their price and their scope to the project, but they're also going to bring a lot of knowledge that they can, they can talk with that millwork company and ask for their advice and, and see what else they can bring to the table. And so, and there's really kind of two points. So there's the point, there's bid date, right? Like, does your number get on their bid schedule or not? Like, are you, um, are you on their list? Did you make it in their proposal that they sent to the client, to the customer? That's one point. So you do want to get on that. That's a great starting point. But then, so say they're awarded the project, estimators hand it over to the project manager, Project managers can make their own decisions. They can go down that list and they're like, well, I know Bob from, from Bob's Millwork, and I know that he'll, he'll do a good job, so I'm going to choose him. Even though they use this other price, I'm going to choose this Bob's Millwork, and, uh, I'm going to talk to Bob, and if, you know, his price is a little high, I can probably work him down. So, so there's that second point. Are you actually, you know, is the project manager, whoever's running the project, like, are they actually choosing Bob? To use you on the project. So there's kind of those two points Um, and that's why it's important that we, that we have good messaging about our company and that we're speaking to really an entire, everybody in the, in the general contractor, like not strictly the estimators, like normally, you know, as millwork estimators, we're speaking mostly with the estimators of the general contractor, but we do also want to make sure that we're communicating our message to, to the entire general contractor and, uh, and, uh, And making sure that we get on that second point of contact that we're actually getting onto the project because I mean I've experienced that numerous times right you start talking with the estimator and you know that they included your price in their proposal and Then there's this dead silence, right? You don't hear anything You can't get a hold of the project manager the next thing You know, the project is is finished and you did not get awarded the project So really those are the two key times where you really want to make sure that you that you get You Onto their proposal and that you actually get the subcontract, right? And again, like the kind of common thread between the two of those is trust Is really trust and so you really want to build that trust with the contractors And work on that Yeah

Jacob Edmond: 32:05

know, for any given trade. So millwork, right. And they're getting bids from your competitors, people that they're going against. And there's only so much time for them to follow up and ask questions. And if you already have a good relationship and that GC already knows, Oh, they're really good at hospitals. This is a hospital. I know they've got everything included there. I don't, I trust that. If you're not that guy, you don't have that relationship. Maybe this is a, you're a mill worker. That's trying to get in with a new GC or a new type of job. Do you have any recommendations as far as how to present your proposal to give confidence? Hey, I've got everything to differentiate or to say like, it's not just price. Cause I know a lot of mill workers are hesitant to give any more information than that. Final price, right? And it's like, we don't want to over commit. We don't want to over communicate. We want to give ourself leeway. But I think that that can work against you just as much to some extent. So do you have any recommendations on how it's just, how do you present your bid? How do you present your scope? Like, Hey, I've got everything included to, to be thorough.

Ben Hudachek: 33:06

Yeah, no, and you need to make sure that your, that your scope is clear, and that your bid proposal is, is clear. And that's really the biggest thing, is clarity, and being concise. Like, on bid day, like, they don't have time to read through, like, a six page proposal. You need to make sure that your proposal is one page, and then your scope can be a few pages, depending on the size of the project. But, that proposal needs to be one page, and it needs to be clear what you're including, and what you're not including. And you need to be very clear about that. And more so, even than strictly the proposals, what leads up to that? Like, have you been communicating with the contractors? Have you asked, you know, informed questions about the project? Have you, um, you know, given them the indication that you're familiar with the project, and that you are actually looking at it, and that you're not just spitting out a number? Um, and making sure that you, as a millwork estimator, are being thorough. And that you're really looking at the project up front early on, you're sending in those RFI questions before the RFI deadline and, and really, um, you're actually helping the contractor, right? If you're asking questions early enough, um, about the cabinets and asking about those areas where there's a gap in the plans and specs and, or there's ambiguities or, uh, there's, uh, conflictions between the plans and the specs. If you're asking those questions, you're actually, you're helping the contractor already, even before you submit your proposal. You're helping them by giving them resources. You're giving them questions to ask about the project and bringing up things, um, that may be potential problems down the road.

Jacob Edmond: 34:40

Or maybe

Ben Hudachek: 34:41

it starts even long before you submit your proposal.

Jacob Edmond: 34:44

what I imagine those questions also make them think, Oh, did my, or is my other mill worker. Thinking about this.

Ben Hudachek: 34:49

Yeah. Right. Exactly. And that's where you can already start to show your expertise in the project. is, is even long before your proposals are submitted. But yeah, again, going back to that clarity. Like, you want your proposal to be clear. And concise. And, um, and, I mean, I know that there's some advantage in not sending your proposal in too early. In the sense that, because what can happen is, let's say you send your proposal in a few days before the bid. Contractors shouldn't, but they could potentially take your, your bid and your scope and send it to other millwork companies and say, Hey, do you have all this? You know, can you, can you match this price even, which is pretty shady and they shouldn't be doing, but you know, it does happen sometimes, but, but even your scope, like if they take your scope that you put all this work into and they send it to other contractors. So if there's an advantage in not sending your proposal in too early. There's also an advantage in making sure that they have it with enough time to review it and ask questions and give you a chance as a millwork estimator to, to make any changes, revisions, and, you know, add the scope that they want you to include or take things out that they want you to take out, um, or give them the different breakdowns that they need for their proposal. You know, a lot of times it's not just one lump sum. Like they have to have, um, The base bid price and then numerous alternates and they need to see the different alternates broken out. So they have to make sure that all their subcontractors are breaking out their pricing equally so that on bid day they can take those five or six prices, whatever it is, and plug them into their proposal sheet in the different breakdowns that they need. So, you know, it is a balance. We don't want to get it too early. We don't want to get it too late. Um, so, you know, and that you kind of have to just play it by ear, but. I would lean towards getting it to them a little earlier. So that they have time to review it, you have time to review it. And yeah, there's a chance that you might be helping out your competitors, but it's a chance that we take, you know. And there again, if a contractor is doing that to you over and over again, and you start to see that, you know, the projects that this contra this particular contractor is winning, your hit rate is really low with them, then you may want to not bid to them anymore, you know. But if there's a contractor that You're winning a lot of work with, and you really have a good partnership, especially in those instances. Um, I would lean towards getting your proposal in a little bit early and giving them a chance to review it before bid day when it's chaos, you know, when they have time to breathe. And a lot of that comes down to, you know, a lot of times our estimators are so overwhelmed, like they're bidding on so many projects. They're not getting into the projects early enough to look for those RFI questions and get them in on time. You know, they're, they're They're getting into the project last minute because they're so swamped with work. And so that's where if we can, if we can optimize our hit rate and we can kind of relieve a little bit of that pressure for our estimators, they can spend more time on the projects that they're, that they're bidding on and do a better job, get into them earlier, look for those questions, take the time to, to review the project with the contractors ahead of time. Like we need to make sure their estimators have enough, enough time. to be able to do that on their projects and really bid well. And you can do that when you know that you have a better chance of winning this project. You know, if your hit rate is more towards 25, 30 percent, like you can take a little bit more time on those estimates and really delve into them a little deeper. But when you're having to bid on so many projects just to, to bring in enough work to keep your shop busy, it's hard. It's hard to spend that much time on the projects and be that thorough. So, yeah.

Jacob Edmond: 38:28

In you're talking about a hit rate optimization, you talked about, you know, the quantity of projects. Is there any, um, consideration for project size that, uh, that you, you know, is there any recommendation you have for that? Like, are you also looking at, I mean, I know a lot of mill workers kind of have a, a comfortable range that maybe they're similar, but you know, obviously you don't want to just. When a ton of tiny projects and lose a lot of big projects, right? Um, you know, how do you, how do you take that into account when you're, you're going through this process?

Ben Hudachek: 39:01

Yeah. I mean, and that's really comes down to each individual company. Like you said, like most companies kind of know their, their happy place of like the size of a project. It definitely is a factor. I mean, you definitely don't want to bite off more than, more than you can chew, right? Like you don't want to bid on a project that's too big for your company and you won't be able to, to complete it. You don't have the, the, uh, the labor to complete it, to complete it on time and to complete it well. So definitely have to look at that. That is definitely a factor. Um, I do like to encourage Like you shouldn't only be winning and bidding on huge projects. Um, I think it is healthy for an organization to have smaller projects to fill those gaps. Um, and again, that depends on, on your, your business model and how your company is run. But for the most part, would you like to have a good Healthy variety in the size of our projects, um, which then also is the same for a lot of areas like we don't, we don't want to be strictly in one industry like it is good to have some, some diversification in the type of projects that we're bidding on and hopefully being awarded. But yeah, the size wise, definitely. I mean, you really have to look at, at your capacity. So you really have to be looking at your schedule, what's coming up. So this project that we're looking at bidding on. is a larger project. When will it start to take place? When's the completion date? What does our backlog look like for that time period? And would we be able to even take this project on and complete it? So really it's a combination of looking at your schedule and also just looking at the size of your company. Like, can you, can you handle it? Um, I, I like to picture, and I like to encourage companies to, to look at slower, more long term growth rather than, you know, Kind of the ups and downs. I mean, I know that there's ups and downs like naturally in the industry, but if we can look at more slow and steady growth over a period of time is better. You can start to build up your employee base. You can start to build up those resources, your capacity, get a bigger shop, if you need to get like a warehouse for storage, if you need to, rather than the kind of sporadic, like let's bid on this huge project, we win this huge project, hire a bunch of people. And then. That project's completed and then great. What do you do? You got to lay off half your crew and that's not fun That's not fun at all for anybody So yeah If you can if you can work your way up to those larger projects and make sure that you have the capacity to take them On like definitely want to be growing like I don't want to put a limit on our company and Say we're only good on projects of this size. Like we do want to encourage that growth, like that capacity should grow over the years. We want to be growing otherwise for, you know, not very successful. Like we definitely want to want to be growing as a company.

Jacob Edmond: 41:49

Awesome. Well, um, from your, your perspective, you know, kind of holistically, are there any trends we talked about earlier? You know, you're seeing a lot of people on boarding new estimators, whether that be from externally or promoting from within. Um, you know, there are any other kind of challenges or opportunities that, um, you're seeing the company should be aware of, you know, in the industry as a whole.

Ben Hudachek: 42:13

Yeah, I've, I would say. Like, be aware of what you're not seeing, you know, those kind of hidden problems, um, and not even necessarily problems per se, but hidden bottlenecks, hidden areas, um, where we could be experiencing growth that we're not. And like I mentioned earlier, like the estimating department is, that happens a lot. You know, I kind of like to look at it as, I used to run a, um, a Wienig molder, right? The four sided planer and, and you kind of, you get the machine up and running, you get it humming, you get everything running efficiently. And then you got to make sure that you're out feed is set up. So you've got people that are going to stack the lumber when it comes out. And then once you get the machine running, oftentimes the bottleneck is you can't keep it fed fast enough, right? Like feeding that machine in, it's all coming out and you just can't keep it running. You want that machine to be running at full capacity constantly. Like you don't want those downtimes. And, uh, and so what, what I had to do was really, uh, Look ahead and really get all my ducks in a row. You like that, Jacob? Get your ducks in a row. Um, ahead of time, right? Sort out your boards. And so you're not running in these, these huge boards, jamming the machine, and then you got even more downtime. It's really getting your ducks in a row and focusing on the in feed. Like you'll find that once you get the machine up and running, that's the area that you really need to focus on. Um, and that's what I encourage companies to do. And that's what I've been seeing is that companies are really, um, Like investing in their estimating departments. I think they're starting to be a greater awareness in how we grow our businesses and where those pain points are and where those areas of potential growth are. And I think there's a greater awareness of the potential growth in the estimating department, and that's a good thing in my opinion. And so I do like to encourage that. It's really, um, kind of get, get out of the rat race. Like take a step back from your business, especially if you're the business owner. There's so many things that are bogging you down and taking your attention. But if you can, if you can break away from that for a little bit and really step back and look at your business overall as a machine and really start to look for those areas that, that maybe aren't screaming, you know, like there are not these great fires and dramatic events, but these areas that are, that are potential areas of growth that we're just overlooking that we're just not seeing because we're so caught up in the day to day and putting out fires. Um, is really just step back and take a look at those areas that there could be some growth and really be, be willing to invest in those areas and pour into those areas, um, whatever that looks like. Like it might be training. It might be that your estimators just don't have the training. Like maybe they were brought up from inside the shop and they, you know, they have great experience with working with Millwork and building things and even installing, but they just, they don't have the computer savvy and they don't have the business savvy of really understanding. You know, what goes into pricing and, and how we should be submitting our proposals and what we should be including and, and that kind of thing, or they don't have the necessary there's, excuse me, necessary sales skills, right? Like there's a little bit of sales that goes into estimating as well, like how you talk to customers, how you sell your proposal and you know, how you respond to, well, your price is higher. Why should I choose you? We've got to have a little bit of sales savvy, you know? So maybe your estimators just need some training, you know, or they need some, some of those kinds of resources and, uh, It's really important to them to really optimize that department and get it up and running. And, and then hopefully the bottlenecks will shift down the line and you can go back to focusing on those problems. And really, that's how we, that's how we go about growth, right? It's little tweaks here and there, here and there, here and there. There's usually not one big silver bullet that's going to fix everything. And we'll experience this exponential growth. Like it's tweaks, tweaks, tweaks, tweaks. So,

Jacob Edmond: 45:57

Awesome. Well, uh, Ben, I think you've shared a lot of really great advice, um, and a lot of great insight on specifically on estimating and business development. Um, if people are interested in reaching out and finding out more about everything you've shared about how they can work with, with you, what's the best way for them to do that?

Ben Hudachek: 46:15

yeah, um, best way is probably just check out our website. Okay. So bh estimating, so b as in boy, h as in Hector, estimating. com. Um, or you can email me directly, um, ben, b e n, at bh estimating. com. Those are two great ways to get in touch with us. And, uh, yeah, if you need a dashboard, like, head over to bh estimating. com slash dashboard, and you can download our dashboard for free, and it's a great place to just get started with a lot of these concepts. really start tweaking and honing in on improving your hit rate.

Jacob Edmond: 46:48

Awesome. Well, I'll make sure we link that in the show notes. So it's easy. If you're listening to this, you should be able to go to the show notes, um, and go right to that dashboard or that website. Um, Ben, as always, it's a pleasure speaking with you and chatting about, uh, about your expertise and about the industry. So I hope I'll have you again on in the future. Maybe, um, uh, we can check back in and see how things are going in a year.

Ben Hudachek: 47:11

Yeah, that would be great. And Jacob, I appreciate you having me on. I appreciate your everything, everything you're doing with this podcast. Like I've talked to so many people who listen to your podcast and they love it. And, and it's been a great help. Like the art, you know, the millwork industry is. There's not a lot of resources out there for us. And so having this podcast has just been amazing. I, I've learned so much from the different guests that you've had on, the different expertise that they bring to the table. So I appreciate everything you're doing, Jacob. And

Jacob Edmond: 47:37

Yeah, thank you. you. having me on. It's been an honor. I love it. Absolutely. Thanks, Ben.