The art of accurate estimates
"We love the design, but it's $200,000 over budget."
Most builders have delivered this devastating news to clients who've invested months into plans they can't afford. Construction costs have surged 40.8% since 2020, fundamentally changing what's achievable within typical budgets. We sat down with Haydn Simmons from Price A Plan to understand how accurate estimating can prevent these painful conversations before they happen.
Construction Estimates Constantly Changing
The pricing landscape has shifted more in the past year than the previous five combined. Haydn explained that effective estimating goes beyond just numbers; it's about building robust systems where each component supports the others, from initial client interaction through to contract delivery.
Price A Plan specialises in construction cost planning and quantity surveying, providing detailed estimates that help builders and clients understand true project costs before committing to designs. Their approach emphasises qualifying leads efficiently, ensuring projects align with realistic budgets before reaching the drawing board.
The Estimating Ecosystem
Haydn's insights revealed that structured estimating isn't an isolated task; it's a holistic process. Price A Plan creates ecosystems where every stage is meticulously planned, from pre-construction processes to engaging subcontractors effectively. Their quantity surveying services provide the detailed measurements and specifications that form the foundation of accurate pricing.
Qualifying clients before proceeding with full estimates can save months of wasted effort on projects doomed by unrealistic budgets. With construction cost increases fundamentally altering project affordability, this upfront qualification becomes even more critical.
Innovation vs Traditional Methods
Technology continues advancing, with AI and 3D modelling offering new possibilities for estimating. However, Haydn made it clear that the personal touch remains irreplaceable. While AI can assist with certain scoping elements, the consistency and contextual expertise that experienced quantity surveyors provide isn’t likely to be replaced by robots.
Price A Plan's approach integrates technological tools without replacing the nuanced judgment required for accurate estimates. This hybrid method of combining human insight with modern technology delivers better outcomes for both clients and builders.
Why Precision Matters
Meticulous measurement of every component creates a safety net between expectation and reality. Haydn highlighted the extensive quality checks and collaborative dialogues that Price A Plan maintains with builders.
Their construction cost planning services ensure that budgets reflect actual market conditions and project requirements. This precision prevents the budget shocks that derail projects and damage client relationships.
Accurate estimating isn't just a technical necessity - it's the bridge between client dreams and buildable reality. With construction costs continuing to fluctuate, professional quantity surveying and cost planning services have become essential rather than optional.
For builders, partnering with specialists like Price A Plan means qualifying projects properly before investing time in detailed designs. For clients, it means understanding true costs upfront rather than discovering budget shortfalls after committing to plans.
The question isn't whether you need accurate estimates; it's whether you can afford the consequences of getting them wrong.
If you’d like to submit a question for us to discuss on the podcast, reach out to us on Instagram.
LINKS:
Price A Plan
Connect with us on Instagram: @themindfulbuilderpod
Connect with Hamish:
Instagram: @sanctumhomes
Website: www.yoursanctum.com.au/
Connect with Matt:
Instagram: @carlandconstructions
Website: www.carlandconstructions.com/
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[00:00:00] Haydn: is that yours, Dan?
[00:00:01] Hamish: No. Did you get one too?
[00:00:03] Matt: I've got one. if you want to, I'll have, I'll finish it off later if you want another one. I drink coffee like crazy are we recording now? Yeah, we are recording. Recording. Okay, good. We are gonna go onto two points here. One, uh, we've got Haydn from Pricer Planning at the moment Act. I need a clap. Fuck. That's so they know to edit it.
[00:00:22] Hamish: can we actually leave everything in that we've just done?
[00:00:26] Hamish: Because it just shows the how chaotic everything is in this podcast behind, behind the scenes. But then it just turns out to this magical beautiful podcast episode. It does. Yeah. So,
[00:00:34] Matt: so Haydn from Price Plan, I'm gonna get that in three seconds, but, We last recorded at the Archie Build Exco Expo probably about six weeks ago.
[00:00:43] Matt: And a lot has changed in our lives since then.
[00:00:45] Hamish: A lot has changed.
[00:00:45] Matt: Yeah, we've had a lot. I've had my first child And you've had your third
[00:00:50] Hamish: we welcomed, uh, little Juniper May into the world about two and a half weeks ago.
[00:00:54] Hamish: That's delightful. And yes, it was amazing. A girl, which is different from me, but you [00:01:00] have a little girl. We had a
[00:01:01] Matt: little girl, little Noah Nevy. Um, uh, so you baby brain, that's why everything is going wrong at the start. But, uh, actually we've got a pretty chill, she's a absolute, she slept seven and a half hours straight the other night.
[00:01:12] Hamish: You know, I keep You've got kids, Amy, and you keep telling me it's gonna change. I, I, Matt's like, oh, I like, how is it? And he's like, oh, it's awesome. She's sleeping, she's eating. And I'm like, today. Yeah. So every time he says that today she sleeps more and
[00:01:25] Matt: eats more. So I'm like, keep going. Maybe you do have this
[00:01:28] Hamish: dream kid.
[00:01:29] Hamish: Uh, look, and, and honestly, Jennifer's the same. But, you know, life is great, I feel.
[00:01:34] Haydn: What's your biggest realization when you get your first child? Like, I'm struggl.
[00:01:39] Matt: I have, I'm struggling with this a bit at the moment. I, running a business is difficult. Having a child is difficult and trying to find the, the limitations of trying to run your business, but also be present.
[00:01:51] Matt: It's a, I'm really struggling with that at the moment. I'm not struggling, struggling is the wrong word, trying to balance it because I'm back 70%. My [00:02:00] 70% is still eight, nine hours. The hard thing is I still rely on an extra three hours some days to get my stuff done. Yeah. Um, and especially the climate where pricing, which we're about to get into is really difficult.
[00:02:09] Matt: I'm trying to get projects on to a budget to meet the brief, which don't align. Yeah. And I need those projects for the future. I'm also building my own house, which is an important stage where we are finalizing a few little change, a few little materials, and then I've got my normal jobs running I'm loving it. I've got it very easy. I've got an amazing support network. Like my wife is incredible and what she's gone through in the whole, like, I'm just crazy. Awesome. But it, it's, it's, and it's not a problem.
[00:02:36] Matt: It's just learning. I'm just learning to balance. So I'm finding at the moment, the big thing that's working for me is like, she's waking up about five. I just jump on my computer, I just stay awake. There's no point trying to get that extra 45 minutes sleep. Yeah.
[00:02:47] Hamish: You know, and I mean, Haydn's probably experienced this too.
[00:02:50] Hamish: Like the biggest change is the, is the first one because your life just completely changed. Yeah. Like what we've found with Juniper is know, we've had [00:03:00] ups and downs with children and all that kind of shit over the last few years. And the third one just seems, I don't know, just there's a lot of muscle memory there and it just feels normal.
[00:03:09] Hamish: Yeah. Yeah. How did you feel with your third, and we're not talking about costing, but I think this is relevant ' cause there's a good segue. Children cost you a lot of money. There's a good segue coming up.
[00:03:17] Haydn: Well, um, my first, um, her middle name is Mae as well. M how do you spell it? MAE. Same with ours. Yep. Yep.
[00:03:26] Haydn: Eliza Mae twins. she's, she's now 21. Wow. So I've got a 2119 and a 17-year-old.
[00:03:33] Matt: So what's worse? A newborn or a 21-year-old?
[00:03:35] Haydn: Well, that was the realization for me was that. When I had a first child, I was like, oh, I'm a father forever now. Yep. This will be forever. So it is cool. I love you. It's wonderful.
[00:03:51] Haydn: So it just constantly changes. So now I've got a 21-year-old who's just returned from two years traveling overseas and Wow. She's, [00:04:00] she's fantastic. She's working in the business for us. Oh, right, okay. She's slotted back into working for us, so it's just is wonderful
[00:04:06] Matt: balance. It's, that's, that's the heart like I am.
[00:04:09] Matt: It's just, and it's learning, like I'm just trying, it's, it's going back to, honestly, and I've gotta probably go back and listen to one of the original podcasts with Julie's. Like it's creating boundaries and that is what I'm learning my boundary at the moment. I'm just finding what works. Like I've just been setting up my phone.
[00:04:23] Matt: At the moment did alter the focus mode. So at like four o'clock my phone goes onto a, a mode of, um, only certain people can get onto me. Uh, and then all my mil, my messages are now getting filtered. So only certain people are gonna pop up at certain times unless I change it. That's 4:00 PM at 4:00 PM 4:00 AM 4:00 PM at 4:00 PM all the way through to 5:00 AM.
[00:04:40] Matt: Wow. So I'm actually fixing that to create the boundary for myself.
[00:04:44] Hamish: as a busy business owner, Matt, like how do you then balance doing everything and cost projects? Like surely there's another way to, uh, to cost building projects?
[00:04:54] Matt: So I'd say this space for me, me, how's that for a segue? Yeah. I know for me at the moment, I reckon I [00:05:00] have seen estimating pricing in the past year has changed so much compared to we've seen more change in the past year than we have all the years before, I reckon with pricing and the way we're, we're attacking construction costings.
[00:05:14] Hamish: So look, I reckon that's a nice segue to throw it to Haydn and say, Haydn, who, who are you? And. What do you do and how can you help builders?
[00:05:25] Haydn: Um, so I'm a father, husband, lover, businessman?
[00:05:30] Hamish: Builder.
[00:05:31] Haydn: Builder. Yeah. Carpenter been many, many other things prior to that, but, um, but the current, what we do is we own a construction estimating company.
[00:05:40] Haydn: We help residential builders, small to medium sized guys. We take the pressure off them with estimating their projects. But I guess what is estimating? We see it as a, a much, much bigger picture than just crunching numbers and getting outta tender. We see estimating as a whole system.
[00:05:58] Matt: Yep.
[00:05:59] Haydn: So [00:06:00] there's many mechanisms that we provide to support builders from qualifying at the beginning right through to setting up project.
[00:06:06] Haydn: So that's a, a whole ecosystem that we see estimating support as.
[00:06:10] Hamish: Could you just unpack that for a second? Because like, 'cause we've, we've dabbled in a couple of different. Uh, ways of estimating. Um, you know, we've gone through you guys before. We've also got our own internal estimator, but we've also used other estimating services as well.
[00:06:24] Hamish: And I love that you call it a system because it is so much more than just someone quantifying how many labor, how many labor hours, and quantifying how many material bits and screws and timbers and whatever goes into a project. Yeah. It's a lot more than that because there's also the delivery side of it, which I think you guys do really well.
[00:06:44] Hamish: Mm-hmm. So could you maybe unpack that a little bit?
[00:06:46] Haydn: Sure. So the, the way we see, I think, I guess way, a good example to use here is when, uh, somebody calls us and they're under pressure, like Matt, he goes, I'm under pressure. I've got this project. I [00:07:00] need someone to put the estimate together for me. And if they're a new inquiry, my first question is, is not like, great, gimme the project.
[00:07:07] Haydn: It's like, okay, how did you qualify that lead? And what system do you have? And so I will want to know that before I just launch into doing an estimate for them.
[00:07:17] Matt: So, funnily enough, I was in a meeting about this topic yesterday and there's about 130 builders talking about this. And they were just like trying to work out how to give the client a cost on the first phone call.
[00:07:27] Matt: I was like, guys, have you even validated the client to see if you get along? Yeah. Like, this makes you, there's so much more before we talk about pricing before you get to that point.
[00:07:34] Haydn: Exactly. Yeah. So that's, that's how I lead off with any new inquiry. I wanna understand that. And then we actually have a pre-construction process that we give away for free.
[00:07:43] Matt: Yeah.
[00:07:44] Haydn: It's a whole template pack that they can just have just to, 'cause there's so many people need that because they, they're just builders are just in this responsive mode.
[00:07:51] Hamish: Yep.
[00:07:51] Haydn: They get the phone call, they respond. Oh yeah. And then they, exactly what you said, Matt, they feel like they would need to give somebody a price or a price indication right from the start.[00:08:00]
[00:08:00] Haydn: So implementing a process related to qualifying their leads is really important. Um, so prior to even getting to putting down the full. Full detailed estimate. Yeah. Um, there's a lot of stuff has to happen in, in first, in case first. Yeah.
[00:08:16] Hamish: And I, and I, I mean, I guess I can just speak from my experience with dealing with you guys.
[00:08:21] Hamish: 'cause you do ask a question like, is this negotiated tender? Or is this a, is this a, um, like a tender process? Mm-hmm. Do you approach those two costing exercises differently? So say if, you know, if we are the only builder costing a project, so it's a negotiated tender, or it's going into a tender pool of three to five builders, is your approach the same for both of those, um, estimates?
[00:08:45] Haydn: The, the, the pre-construction process, which is everything prior to actually doing a full detailed estimate is pretty much the same because we believe that you still have to qualify them, whether it's a tender process [00:09:00] or a negotiated tender. And I think you still have to qualify a hundred
[00:09:02] Matt: percent. I couldn't agree more.
[00:09:04] Haydn: Um, once you get to actually crunching the numbers on it and putting the full estimate together. That's pretty much the same. Yep. Yeah. 'cause I think the details required regardless.
[00:09:13] Hamish: Yeah. Yep. Because it's interesting, I've look, I mean, I haven't tend tended a project for a long time and you're always gonna get three wildly different prices.
[00:09:23] Hamish: You get a high one and middle one and a low one. Mm-hmm. The low one, they've got no fucking idea what they're doing. The high one's probably where the price is gonna be, but the clients always pick the middle. Mm-hmm. And, uh, have you got any data related to, and I'm kind of jumping around a little bit, but do you have any data related to, um, estimates that are going into a tender process versus estimates that are a negotiated tender?
[00:09:43] Hamish: And how many of your tender prices actually go to site? 'cause I would imagine that the prices that you are giving are actually correct. Mm-hmm. But are probably on the higher side.
[00:09:54] Matt: Are they the higher side though? Is that just what the value is? Well, no, no, no, no,
[00:09:58] Hamish: no, no. I say so they're perceived as [00:10:00] being higher.
[00:10:00] Hamish: Yes. Like if they're in a pool that they're probably higher because you are quoting them correctly. Yeah. Whereas the builders here that are just part of a tender pool, they probably just. Pulling some numbers together and going, here you go. Yeah. And, you know, throwing a dart at the wall and hoping That's right.
[00:10:14] Hamish: Yeah. Do you have, do you have any data related to how many of those tenders go to construction?
[00:10:20] Haydn: Mm. Not, not on people that are in a tender process. No. We know we've got data on our overall
[00:10:26] Hamish: Yeah.
[00:10:26] Haydn: Company, but there's no differentiation between those that are negotiated versus a
[00:10:30] Matt: Yep. So, so versus a tender, tender, for me, I think one, it's a race to the bottom.
[00:10:36] Matt: Yep. Mm-hmm. Secondly, if the architect or building designer has not designed that detail, that's not included. So I think as you do a, a tender, the rate and chance of a variation is so much higher compared to a negotiated tender because those details have not been discussed.
[00:10:51] Matt: And I think that's something that really needs to be considered because it's not just the tender of what you start at, it's what happens during the site. Yep. Yeah.
[00:10:58] Hamish: Yep. And, and one of the things that I [00:11:00] think you guys do really well is you, when there's deficiencies in the plans, you guys are actually making suggestions.
[00:11:07] Hamish: think you've even said to us, we actually think this is what should be going here. So we've actually made that allowance. Right. So you are, you are actually picking things of the plans that aren't there and putting costs to it, not just quoting what you see.
[00:11:17] Matt: Yeah. Yeah. Can I add in on that?
[00:11:18] Matt: So I would also go as far as saying a negotiated tender as you actually thinking how to build a project. Yes. Where a tender project is just like, we don't care how you build it. We'll work that out later. And if the plans are wrong, we'll hit you with the variation. So
[00:11:29] Haydn: what, what, what we do differently, what is the big difference in the way we support our clients, whether it's a negotiated or a pool tender is I'm saying.
[00:11:40] Haydn: Are you sure you want to be in this tender process? And how many people are there? Is the question, what contract is gonna be put in place? Yeah. Is it an architectural contract? There's,
[00:11:51] Matt: there's another 5%. If it's an AB contract straight on the cost,
[00:11:53] Haydn: and who's gonna be, is the architect gonna be a superintendent on the project?
[00:11:57] Haydn: Yeah. So these are all warning signs that I [00:12:00] think I try and educate guys about to make sure that they're really comfortable with the process. And unfortunately, quite often as well, when you're in those tender scenarios, the architects throw the idea of charging for the quote out the door. Yep. So you can't charge for the quotes.
[00:12:15] Haydn: It's just all these reasons why I think that's, but they also designed
[00:12:18] Matt: to about 70% and will want to fi get the rest later in construction. Mm-hmm. because while we're on negotiated tender versus the a.
[00:12:26] Matt: Competitive tender. Are you finding people's margin and contingency differs between the two? So, because I can openly tell you if I'm competitive tendering, which we don't, my contingency is higher, my margins higher to allow for different things that can go wrong, negotiate tender, we know the project back to front, so there should be a lot less risk.
[00:12:43] Haydn: Look, we work with so many builders and everybody's got a slightly different number that they feel is right for their markup. Um, what we believe is that regardless of what type of process you're in, you should just have a, a markup that suits you both growth of your business. Yep. So and the [00:13:00] contract, it's more more about what they need for their business sustainability.
[00:13:03] Haydn: Yeah. Um, but unfortunately what the common reaction is that I've learned from our clients is they feel like they're in their competitive tender. their tendency is to reduce their markup. Yeah. Because they think, oh, I'm in a competitive scenario.
[00:13:16] Haydn: Yeah. I just wanna be a bit cheaper to make sure I get it. So they'll sacrifice their markup. That's really common, but really dangerous. And then I love the fact that I just then follow up with the discussion about that and what that means and asking what they know about their difference between markup and margin.
[00:13:32] Haydn: So I try do a lot of educating in what we do as well.
[00:13:35] Hamish: And I mean, I know that there's homeowners listening to this podcast, so I'm, I am just gonna jump in here and sort of justify why builders should not reduce their margin. Mm-hmm. Or markup. Yep. It costs a certain level of money to run a business. Yes.
[00:13:49] Hamish: Yes. So whether that's 17, 18%, it's usually
[00:13:52] Matt: between 10 and 22%, I think in construction. Yes, you're right. So I know
[00:13:55] Hamish: that mine's at 17 to 18%. Yeah. So I know a minimum I need to mark up my [00:14:00] business 17 to 18% just to cover costs. Yeah. Before my business makes any money whatsoever. Yeah. You know, and as a homeowner, you want your builder to make money.
[00:14:10] Hamish: Mm-hmm. There's no point in him losing money. 'cause I guarantee if he starts seeing, or he or she starts seeing, they're starting to lose money as the project's getting to an end, they'll cut corners. I guarantee it to try and, yeah.
[00:14:21] Matt: We see this, I, I joke here all we see this over social media so much. I've got a builder who I've been talking to who has missed out on two or three jobs because he was cheaper and has been sending me the project that he missed out on.
[00:14:34] Matt: Like, look at all the shortcuts that have been taken. Yeah. It's, and he's like, that's what they're paid for and that's why they're 300 grand more cheaper. But look at, look at they, they're stupidly putting this on social media. And I'm like, that's non-compliant. That's non-compliant.
[00:14:46] Hamish: I mean, in, in summary, know your numbers, know your break even first, and then work out what you wanna make.
[00:14:50] Hamish: Yeah. But you talk quickly about, uh, you said you have a whole pre-construction process, so what is that template that you, you offer or, or that I guess that pathway or [00:15:00] steps that you.
[00:15:00] Haydn: It's, I've tried to keep it really simple and digestible, which is
[00:15:04] Hamish: great for builders. Yep. 'cause a lot
[00:15:06] Haydn: of guys, when they're starting off, you don't want to get overwhelmed with extra, extra administration tasks.
[00:15:11] Haydn: But having an a, a process that from the time you receive a first phone call through to when you actually deliver that contract, um, that's the pre-construction process. so what it looks like, I've broken into three stages. Stage one is, uh, let's get to know each other and I give a sample questionnaire.
[00:15:34] Hamish: And when you say get to know each other, that's the builder and the client. The builder and the client. Yeah. Builder and the client. Yeah. Builder and the client. Yep. So
[00:15:39] Haydn: I'm, everything I'm doing here is helping the builder in his relationship or potential relationship with that client. So it's getting to know each other and I just give a sample questionnaire.
[00:15:47] Hamish: Yep.
[00:15:48] Haydn: I tell them, you know, refine that to suit what you want. Yep. But you know, questions like what's important to your price or quality. Mm-hmm. have you got bank finance or are you cashed up? Uh, when do you wanna start? Um, can you [00:16:00] gimme, have you got any Pinterest boards that you've Yep. You're interested in?
[00:16:02] Haydn: Like, these are things that you're trying to, looking for indicators that might make the project a bit tricky. So if they get past that stage, then your next stage is doing a budget assessment on them. So it's a, um, budget qualifying step.
[00:16:17] Hamish: Yep.
[00:16:18] Haydn: Um, now whether you do it yourself or use a tool or you use price to plan, we've got a, a service called QBE, which stands for quality budget estimate.
[00:16:26] Haydn: It's a short form estimate that breaks down the various aspects of the build and puts a forecast on it.
[00:16:31] Matt: So why not just use a square meter rate? Because it is my most hated question, like, let's apply square meter rates to the project and it does not work.
[00:16:40] Haydn: No, it doesn't. So our, our QVE essentially uses square meter rates, but it breaks the various components of the build down into about.
[00:16:48] Haydn: 20 different segments and then a various rate applies to that segment. Yeah. So, so each of
[00:16:54] Hamish: those, so rather than just look at the floor plan holistically, you're looking at all the individual
[00:16:58] Matt: I'm assuming you take to the [00:17:00] site into, like you, you account for that. Like if it's a sloping site, you've, that's square meter rate accounts for it.
[00:17:05] Haydn: Yeah, absolutely. Absolutely. Yeah. So design, selection, quality of plans. Yep. Yeah. Perplexity of detail. There's a whole range of qualifying factors that go into that particular service that determine where the, where the project should sit. And then we put our numbers, we measure the various areas that relate to it, and it puts out a forecast.
[00:17:25] Haydn: It says, based on the issue projects gonna be between A and B. Yeah. It's about a 20% range between those two things, then we then the builder will then present that to the client and go, are we on track here? Where are we?
[00:17:36] Hamish: Yep.
[00:17:36] Haydn: And what we see is that 75% of those that once a builder gets to the QBE stage, 75% of the projects go away.
[00:17:47] Matt: like 80% of architectural builds don't go to side as well. Yeah, let's just,
[00:17:50] Haydn: so you're basically getting rid of three quarters of your leads.
[00:17:55] Hamish: that number might scare some people. 'cause you might, some builders out there go, whoa, hang, [00:18:00] well I'm losing 75% of these, you know, potential leads or potential projects.
[00:18:04] Hamish: Yeah. And I need to get projects on site. Yeah. But the reality is you want to know that that project's dead in the water as quick as possible. Totally. Like if you don't want to get to the point where you're doing a full cost estimate and you're half a million dollars over. Yeah. 'cause you've just wasted three months of your time.
[00:18:20] Hamish: I've done
[00:18:20] Matt: that so many times as well back in the day. Like, I now kick myself and you think this project's going ahead and the budget isn't meeting brief, which is the biggest issue we have in construction right now.
[00:18:30] Haydn: Yeah. So let's, let's go back to where the QBE started for me, in, in our company, when we first started pricing plan, we were just doing the, the full detailed estimates, right?
[00:18:39] Haydn: Yeah. We're doing that, doing that for a number of years, and then, um, then you quickly realize how emotionally, mentally draining and financially draining it is to deliver a full detailed estimate to then find out that they're about a hundred, you know, $500,000 short, or the [00:19:00] budget expectation wasn't lining up.
[00:19:01] Hamish: Yep.
[00:19:02] Haydn: So we were like, how can we, how can we stop that? So we developed this preliminary service called the QBE. So it's been in existence for about, um, about 12 years. I think QBE is actually becoming a little bit of an industry
[00:19:17] Hamish: slang. I think, well, we, we might do something very similar in our business, but, so this is another
[00:19:23] Matt: thing I also.
[00:19:26] Matt: Dislike a lot of this process at the moment. 'cause so many people are just jumping on this for the first time. Mm-hmm. And don't understand how this also works. Yeah. And there's like, we have multiple years of mistakes learning from this. I understand you've gotta start somewhere.
[00:19:37] Hamish: Yeah.
[00:19:38] Matt: I think a lot of people are now just getting excited because they see it everywhere, but not understanding the process to actually get from A to Z.
[00:19:45] Haydn: Yeah. Well look, if people are adopting it as a concept and they're implementing it,
[00:19:49] Matt: it's better than nothing.
[00:19:50] Haydn: Awesome. Fantastic. Because if you have the right people
[00:19:53] Matt: behind you, the thesis is someone, if you are doing this for the first time and then running the numbers yourself, and then you're like, oh, well I wanna make this [00:20:00] job look good to get it across the line.
[00:20:01] Matt: Well that's defeating the purpose. If, if you are running a QB for the first time, you should be getting someone like yourself involved to, to understand this process.
[00:20:09] Hamish: I mean, or, or, or have really good solid metrics to be working on.
[00:20:14] Matt: But the reality is people don't.
[00:20:15] Hamish: Yeah.
[00:20:16] Haydn: So that's where it, it originated from, we just saw a need, you know, and, and again, I talk about the emotion of it because.
[00:20:22] Haydn: It's heart wrenching, like it's so deflating, right? Builders care immensely about their client and the project. And then to reach that point where all of a sudden it just falls flat, it's just like, ugh, just wasted so much time. So let's just fix that. Yeah. So that's where the QBE originated from.
[00:20:38] Matt: And when did you start doing QBE?
[00:20:40] Matt: 'cause I'm gonna take a guess. And this has come out of a result maybe of COVID and pricing increase 12 years ago. 12 years ago. So because I've got data here, and this is what I've been playing on my phone in the background. Mm-hmm. Since 2020, construction prices are at 40.8%, uh, from 2020 September to March, 2024.
[00:20:57] Matt: So a million dollar job, there's an extra [00:21:00] $408,000 is on the project. Yeah. And reality is most projects that we look at are starting around a million. Yeah. That's not a small amount of money. Um, where I want to get with this is like, there's been a huge increase. Yeah. It's insane. And now budget is not meeting brief and we're in this pickle of construction where we need to build 1.2 million houses out of nowhere with not enough labor, not enough people to do it correctly.
[00:21:22] Matt: We were trying to spit up, spit 'em out at a rate that's not, uh, it's, it's not achievable. Yeah. It's, and the quicker you build shit homes, like we have our current NC, the more shit we're gonna have to fix.
[00:21:32] Hamish: Yeah. I mean, and again, I think it's a whole nother thing of a, you know, whole other, but where, yeah.
[00:21:35] Hamish: Where I wanna get
[00:21:36] Matt: at, at this is like, how have you seen with the construction prices and adapting to that because that's, you've all of a sudden gone from like pretty solid data went back before 2020. You kind of knew that. And with, if you had $800,000, you're like, well these clients have a bit of money now.
[00:21:51] Matt: $800,000 is like, goes with the click of a finger.
[00:21:54] Haydn: price of plan is 18 years old. Yep. And I know square meter eight are not what [00:22:00] your base things on. Square meter rates on average build prices. There is, it's a, it's a relevant, um, metric. So I remember when I started, when, this is fucking how long I've been doing it, is when you using hard frame the hammer when it was like, oh my
[00:22:16] Hamish: god.
[00:22:17] Hamish: Yeah.
[00:22:17] Haydn: $1,500 a square meter, right? Yeah. Then it cracked two and then just before COVID it cracked three was the, the, the sort of starting point really. Um, and now the starting point for projects is. Four and a half to five.
[00:22:37] Matt: Yeah. If you're lucky.
[00:22:38] Haydn: If you are lucky. And the majority of stuff we are seeing, because what we're, what we see is the people that are actually investing in their properties and doing stuff, they're cashed up clients.
[00:22:49] Haydn: They're the ones that are doing stuff. So the project values are just like
[00:22:52] Matt: building is for rich people now
[00:22:53] Haydn: excite. Yeah, it is. And so projects up between 8,000 to 10,000 square meter is, [00:23:00] is becoming more and more common. So it's, and did all your data
[00:23:03] Matt: post COVID just have to be thrown out? Because you can't, like if you've got like say an average square meter rate that you kind of looking at, did you have to go like, we can't of rely on any of that construction cost data pre COVID because it's gone up so much.
[00:23:15] Matt: Like how can you, how can you run an average if you're saying, Hey, on average we know this there, we know it's gonna be three and a half thousand square meter. But if you're now confusing data from 2018 with data from 2022 No, it's, it's big change.
[00:23:27] Haydn: Yeah, absolutely there is. But it's not how we approach it.
[00:23:30] Haydn: Yeah,
[00:23:30] Matt: yeah, I know. Yeah.
[00:23:31] Haydn: So to give you a bit bit of insight, how we do approach it. So firstly, we are lucky. We are, we're quite large. We have a huge volume. So we would be delivering between five and 12 full detailed estimates per week. Wow. Wow. So it would've equates to about, um, half, over half a billion dollars worth of project value per year.
[00:23:51] Haydn: And what we do is we, each project that comes in, we run a whole classification system and we assess what type of project is like site, like you're saying, [00:24:00] they're sloping sites, complexive detail, passive, there's, we classify it, right? And then when we're doing those full detailed estimates, we go, okay, this project is classified as an m mr six or an m mr six or an a, c, b, it's their own internal system, right?
[00:24:13] Haydn: No one else sees that. It's just ours. But then we track what the result is of that estimate once it's finished. Yeah. And then we have a number, so that's where the, the, the data for the average square meter rate is. Okay. Like it's basically being replaced monthly. I was just gonna say, yeah, that's fine.
[00:24:28] Haydn: That's,
[00:24:28] Hamish: your data is live. Like it's constantly updating itself, so it kind, it's almost irrelevant what it was in 2000. Well, that's what I wanted. That's, I'm going full 360
[00:24:37] Matt: because people just average it out over their whole life span. But I'm like, your data from before 2020 is completely irrelevant. The way we build now.
[00:24:44] Matt: It, I always go back to the can of Coke analogies. Like everyone goes, what do you think a can of Coke costs? And I always go back to a dollar. It's now $3 $54, but it's the same as building. We still think building is 1500 a square meter. 500,000 gets you an amazing architecture home. The reality it doesn't because [00:25:00] prices have gone up, as I said, 40.8%.
[00:25:02] Haydn: Yep.
[00:25:03] Matt: Um, yeah, and it's,
[00:25:04] Haydn: it's, and I feel for the consumer as well, like the homeowner, right? I feel for them because they're, and, and the, the, the, um, the process is ass, is ass about, right? This is the fact that they're going to their, they're going to a designer or an architect for advice first on what to expect, and then come back and then come back to, it's a completely freaking ass about.
[00:25:23] Hamish: Yep.
[00:25:24] Haydn: Um, and then the poor consumer gets a shock, you know, when the builder tells 'em reality or when pricer plan tells 'em reality.
[00:25:31] Hamish: Do you know what? Do you know what, and, and again, I'm, I'm, maybe I'll jump in and, and I don't know, defend some building designers and architects, because I know that we do throw them under the bus quite a bit,
[00:25:42] Matt: throw ' em under again.
[00:25:42] Hamish: I had a designer reach out to me, uh, about three or four weeks ago. Uh, it's a project that we've got in pre-construction at the moment and he said, look, I'm about to present this, uh, this, this design to the client. We've kind of run it through our internal metrics and we think it's gonna be here. Mm-hmm.[00:26:00]
[00:26:00] Hamish: And I replied, I looked at it for 30 seconds and said, don't even breathe those numbers to the client, please. Mm. Because they're way off. Yeah. I think it's gonna be between here and here, but the simple fact that he's actually reached out to me, running past me and asked me before he's actually said it to the client, tells me that designers and architects are actually starting to realize the input that a builder, the valuable input that a builder can put into a project in those early stages.
[00:26:27] Haydn: So true.
[00:26:28] Hamish: Three or four years ago, that wasn't the case.
[00:26:30] Haydn: No.
[00:26:30] Hamish: Now I feel like they're like, shit, hang on. Now projects aren't going to site. How can we make them go to site? And it's actually putting them, putting a design in front of the client. That's a reality, not a dream. Sure. Because so many times how many fucking projects have fallen over even now?
[00:26:46] Hamish: Oh,
[00:26:46] Matt: I've had over $10 million worth of work full over the last 12 months because budget didn't meet brief. Yeah. I also want to say that I feel so sorry, and I said this to an architect yesterday. Architects and boom, designers have it so [00:27:00] hard when they need to. They've got a budget that comes to them, they need to now design to that budget.
[00:27:05] Matt: And where do you start to put a pen on paper? Yeah. Like they're, they're like, they are so hard. And I think that any advice I'd probably have to clients or anyone looking to build, uh, any advice to anyone looking to build would be, there's three things. It's your budget, that's what you wanna spend. Then there's your brief and that's what you've told the architect that you want to build.
[00:27:22] Matt: And then there's a bill cost. And the bill cost is what that brief costs to build the budget at that point is totally irrelevant. Mm-hmm. Because it's the budget and brief never align.
[00:27:30] Haydn: Yeah. So I guess if, if, if you're a homeowner wanting to build a home or renovate a home, I think that a really important question that you should ask of your architect or designer is have they got a builder involved in the design consultation?
[00:27:46] Haydn: I think that's an important question. Uh, if you're a builder. And you, um, are looking to grow your business and you're looking to align with architects, um, ask them at which point the builder's input [00:28:00] comes to play. Um, that's what you should be seeking out for your ideal client. Yep. It's not fair to put
[00:28:07] Matt: the pressure on the architect draw it, but also work out how to build it.
[00:28:09] Matt: That's not like everyone has their strength. Everyone has their, honestly, it's not fair on them.
[00:28:13] Hamish: If we are talking about this pre-construction thing being a process, there are multiple people that are within that process. It's not just the architect. That's right. It's not just the estimate, it's not just the builder, it's everybody.
[00:28:23] Hamish: Yeah. And everybody has really important input into that entire process for the project to be successful.
[00:28:30] Haydn: Yeah. Yeah. If there's one thing that, that I would just love to see the industry flip on its head that that just becomes the norm. I do have architects and designers that come to us Yep.
[00:28:40] Haydn: At concept stage. Yep. And they utilize price of plan to give them a forecast. And they love it because it removes them from the budget shock.
[00:28:47] Hamish: Yes.
[00:28:48] Haydn: It's not them, it's a separate party. And then that, that actually they, there's guys that are embracing it. Designers and architects are embracing that, which is awesome.
[00:28:57] Haydn: I applaud that. That's fantastic. Um, I also [00:29:00] have architects that use us that, um, still, we don't work with them. We qualify them. So we just don't work with them because they still believe that, um, their industry knowledge is on pricing as more relevant. Low. But what what interesting is, um, I've got one architect, um, and he teaches architecture at University of Queensland.
[00:29:21] Hamish: Mm-hmm.
[00:29:23] Haydn: And I was asking him the other day, like in training, where does the builder come into the consultation process related to your design? What are that, what are you teaching in relation to budget forecasting on project and managing budget? And he's like, oh,
[00:29:41] Hamish: we don't, doesn't exist.
[00:29:42] Haydn: Doesn't exist at a, at a university you training over, because all they're focusing is on building code, energy codes, you know, design all these, there's things focusing on make the curriculum let's, and actually think, so it's not being taught.
[00:29:54] Hamish: That's a really important thing to bring up too, because there's a lot of, there's a lot of conversations that we have [00:30:00] as builders in our little builder groups saying, oh, this fucking architect or that bloody designer, blah, blah. Mm. It's actually not their fault.
[00:30:06] Haydn: No.
[00:30:07] Hamish: Because they're taught in a certain way.
[00:30:09] Hamish: That's right. And I think we were chatting with your friend a few weeks ago and um, it was a really insightful conversation because I had a really aha moment. ' we had to
[00:30:19] Matt: delete this conversation, by the way, just to give reference. Like we had, like we had to delete because they were so worried about what if the architect institute.
[00:30:27] Matt: Found out about this podcast, they were worried what they would think of it. It was a really
[00:30:30] Hamish: honest and raw conversation, and it actually made me feel a little bit more empathetic towards how they're approaching things because they've been taught to do their process in a certain way, and the builder in the budget are never considerations, not taught how to do it.
[00:30:46] Hamish: And it's something that's learned over time, I think. But they were
[00:30:49] Matt: conflicted by the way They will, they spoke out about how they thought it was outdated.
[00:30:53] Haydn: But they do the, the, that particular architect says, oh, well, we do recommend it's best to go to a another [00:31:00] party for a price check.
[00:31:00] Hamish: Yeah.
[00:31:01] Haydn: On it. But, you know, that's the builder one. One thing I will say about an architecture designer
[00:31:06] Hamish: going to a QS or going to someone like yourself is that that's just a very broad. Indication of where the price is. And you can't apply that price to every single builder that comes through. 'cause every single builder has different structures.
[00:31:23] Hamish: Yeah. Have different overheads. Have different,
[00:31:25] Matt: actually almost do it with no margin. Don't put any margin on if you're gonna do a, just to build to
[00:31:29] Hamish: cost, just to build to cost.
[00:31:31] Matt: And then if you wanna, because again, like the way that we operate and do things is differently.
[00:31:35] Hamish: I mean, unless it's a range and you say like it's between XY, it's between 20, and then it kind of captures, you know, what builders markups or margins should be.
[00:31:44] Haydn: no. 'cause you've gotta have a range at that qualifying stage anyway because you can't, you can't pin a number down a big key
[00:31:49] Matt: word qualifying. It's not a price, it is a value. It's a checkpoint.
[00:31:54] Haydn: It's just a huge part of what we do in our business. I really. Proud of [00:32:00] it. Really? Yeah, because it just, it just saves everybody so much time.
[00:32:03] Haydn: Yeah. And money. And money. It's a validation
[00:32:06] Matt: tool for a client. Yeah. That's, that's like you spend 3, 4, 5 grand to that point. Understanding is your project Bible. Mm-hmm. Then you go yes or no. If it's no, you're not spending another a hundred K design fees to then find out at the end mm-hmm. That your project's not liable.
[00:32:21] Matt: Do it all upfront,
[00:32:21] Hamish: like, as far as your cost go around the QBE, are they, are they kind of fixed or are they dependent on the val, the project value
[00:32:28] Haydn: and there's two price points, either 4 95 for standard stuff, six 60 if it's crazy architectural. Okay. You know what a crazy architectural means? Means there's 300 pages of documentation that we've gotta digest
[00:32:41] Hamish: that is like such a small number to pay to qualify a client within two weeks.
[00:32:50] Hamish: Yeah. Because yours might take a minute to get together and then it's a little bit of time for the builder to digest it and mm-hmm. Put it together in a, some kind of presentation. That is such a small [00:33:00] amount of money to pay to qualify,
[00:33:01] Haydn: but we brand it up for the builder as well, so it's like it's coming from the Yeah.
[00:33:04] Haydn: Yeah. And I mean I know
[00:33:05] Hamish: that 'cause I've experienced it, but it's nice to you for you to explain that. Yeah.
[00:33:09] Matt: Now I have a question and I don't know if I wanna ask this,
[00:33:13] Hamish: but ask it anyway.
[00:33:14] Matt: and it goes back to where we started this whole conversation at the start of this, having children,
[00:33:20] Matt: Labor in Australia is extremely expensive. Mm-hmm. Okay. It is the major driving factor of every construction price. Now, I, we at times poo poo architects, I'm gonna poo poo tradies here. I think a lot of tradies are taking the absolute piss when it comes to what they're charging out per hour. Mm-hmm. Why I link that back to having a child is watching the nurses and the effort they go to and what they get paid and their average 37 to $38 an hour when.
[00:33:45] Matt: They should be paid a lot, lot more than what they do. Yeah. And then you've got tradies wanting $1,200 a day. Mm-hmm. I think labor in Australia is way too expensive. Mm-hmm. And I understand and respect that people need to get paid a very, very good wage. [00:34:00] Maybe the nurses need to get paid a lot more.
[00:34:01] Matt: Mm-hmm. Maybe tradies are what they should be getting paid, but I feel that the issue that we have in pricing in construction at the moment is that everyone wants more and more and more and more. Mm-hmm. How are you navigating that conversation? Because it's something that's been on my mind for a long time and it got justified.
[00:34:18] Matt: I wanna
[00:34:18] Hamish: add to that and, and ask you in your opinion, and, and, and I don't want anyone to hold you to this, do you think as we're going into now, or where we're currently in a more competitive market mm-hmm. Like we're, we're that there's more builders competing for, you know, lesser projects? Well, in Victoria anyway.
[00:34:37] Hamish: Yeah. Do you think that prices will check and come down a little bit? I don't think that then there's no way they're coming down to pre COVID. But do you think they're gonna become a little bit more digestible for clients?
[00:34:48] Matt: No. No. We have 40,000 jobs in Victoria that need to go out of commercial construction somewhere at the end of this year.
[00:34:55] Matt: They don't have work. They're already trying to come into this area. I feel like they're gonna have, [00:35:00] they've gotta be competitive. I'm seeing for the first time people actually maybe lowering their rates to get a job.
[00:35:06] Haydn: I'm not an economist. Yeah. Yeah, I know. That's a very loaded, hard question.
[00:35:09] Haydn: So that's, there's a lot of other factors that relate to that. But on the tradey level, so their, their approach to pricing a project is, would have even less structure than what most builders have. And a lot of builders processes is, is questionable, right? Yeah. So they, um, yeah, they have less systems related to putting a price together.
[00:35:31] Haydn: And so what they typically do is just throw numbers around. Yeah. So. Really understanding what our subcontractor's real price is for a project is fricking tricky
[00:35:42] Matt: with no accountability because they're not licensed. And I know that's a whole nother topic. Yeah. But they get to put in a price, go to the job, we sign off on it, and at the end of the day, they get to walk away Unless you're a plumber or an electrician.
[00:35:54] Haydn: Yeah. Yeah.
[00:35:54] Matt: That's it.
[00:35:55] Haydn: So what do you, what do you do as a builder at, at putting [00:36:00] together your, your tender with all of those variables and unknowns? You just, you know, you've gotta have a seriously robust system that's seeking data from as many sources as you can, which I believe is really hard and almost impossible for the builder to do on their own.
[00:36:17] Hamish: Yeah.
[00:36:17] Haydn: Which is why I believe that using outsource partners for estimating actually creates a more robust system. Yeah. If, if they've got good systems like price plan.
[00:36:28] Matt: And on the flip side, to argue the opposites, what I've just argued is one, trays have to have a huge amount of insurance. They the only job where they have to pay.
[00:36:35] Matt: Tens of thousands of dollars to have their tools to go to work that are most likely gonna get stolen once, three, five times in their lifetime. So I also understand why their hourly rate is so expensive to pay for these things.
[00:36:47] Hamish: But I, I'd also argue, and again, this is no criticism to, you know, trades, but I'd also argue that, I don't reckon you could call up any of your trades and ask them what their breakeven is.
[00:36:59] Matt: [00:37:00] No, but I also, I also, at the same may, maybe I'm wrong and maybe, maybe I
[00:37:04] Hamish: shouldn't say that, but I, I like, I know, I know where mine is and you probably know where yours is and I'm sure you know where yours. Too. Yeah.
[00:37:10] Haydn: But I don't think you can just single out trades with that. You could say the same of the majority of builders as well.
[00:37:14] Hamish: Well actually you, you are, you probably hundred percent. A lot. A lot of small
[00:37:17] Haydn: business. Small. I think just small business owners in general are guilty of that. Right? Yeah, true. So I don't think you can single out tradies for that.
[00:37:22] Hamish: Thanks for saving me. No, no, no, no, no. I,
[00:37:25] Matt: yeah, I actually, I feel for them.
[00:37:26] Haydn: We're just business owners, right? Yeah. Everyone's just a business owner, whether you, whether you're hanging drywall or you, or you've got running a laundromat. Yeah. Knowing your, your baseline costs of operational costs is key. And, but unfortunately, a lot of people leave that last.
[00:37:40] Matt: I also think that, um, we have a number of trades who are amazing at charge, A very good dollar that I think should put their prices up because they're extremely good unskilled at what they do. Yeah. So, uh, I just think the issue that we have is, you see Hamish is, I know caulking company charging this, so I'm gonna charge that, but now I'm gonna charge more because they're put theirs up and it's [00:38:00] just, but how did you get to that number?
[00:38:01] Matt: Like, what made you decide that that's the number that you wanna charge? Yeah,
[00:38:04] Hamish: I mean, I think at the end of the day, clients are gonna go ahead with their project. If they say value in the number. If they, if they think that the end result with the, with the money that they're paying is value for them, yeah.
[00:38:16] Hamish: Then it's kind of almost irrelevant what the number is,
[00:38:18] Haydn: for the, the ideal client.
[00:38:20] Hamish: For the ideal, yes. Sorry for the ideal client. Yeah. Um,
[00:38:24] Haydn: unfortunately not ever, all of all clients have got that freedom. Yes. So the ideal client, so as a builder, if you're qualifying and you're looking to qualify, you gotta find out who and what your ideal client looks like.
[00:38:35] Haydn: Yep. It's an important part of it, but unfortunately
[00:38:37] Matt: the ideal client is rich, isn't it? Isn't that the reality? Yeah. That they've got the money to the ideal client is Yeah. They're rich and their budget meets their brief. Yeah. That is the, and you're obviously a nice person. The project's cool. The location suits you.
[00:38:49] Matt: Yeah. And,
[00:38:49] Hamish: and this is the tricky part because I know you, and I've talked about this before, and, and I think the reality is that the, that building a new home is from the more wealthy. [00:39:00] Demographic. But it should because everyone should deserve to be able to afford to build a home and a healthy, comfortable home.
[00:39:05] Hamish: Not just a home healthy and a healthy, comfortable home. So,
[00:39:07] Haydn: and, but, but also I, I think what the future of building homes will look like, like this question that it's almost becoming unaffordable for majority of people. I think homes are gonna get simpler. We are gonna go back to like, like homes that are just a three bedroom, one bathroom, perfect, digestible home, right?
[00:39:26] Haydn: Yeah. Because the wishlist now people need to throw Pinterest out the window because, you know, you can't afford an elevated garden bed. You can't afford a skylight over your shower.
[00:39:36] Hamish: Yeah.
[00:39:37] Haydn: Even though it looks really great. Um, but people just gotta get more realistic about what, what they can form and just having a practical, well designed, functional home.
[00:39:45] Haydn: It's
[00:39:45] Matt: keeping up with the Joneses. My next door neighbor's got a mud room, so I'm gonna have a mud room, a laundry, and now I'm gonna have a bigger butlers pantry. 'cause you don't have, yeah, I
[00:39:53] Hamish: mean I actually feel that, that the current, well current. Economic situation is gonna force that hand.
[00:39:58] Haydn: Yeah, I think so.
[00:39:59] Hamish: [00:40:00] Which I personally, from someone who's coming from a sustainability point of view, we should just be building what we need. Yeah.
[00:40:07] Matt: But it goes back to like, think of the house you grew up in. Like there was Yeah. Exactly what the list you had. Yeah. Simpler. And then you had a backyard. Now everyone's complaining they don't have a backyard.
[00:40:15] Matt: It's 'cause we're fucking building another a hundred square meters into the backyard. That's why we don't have a backyard anymore.
[00:40:21] Haydn: I want to, it's a bit of a, talking about what we are doing in that subcontractor space. Yeah. Yeah. Because I think it's a, I I'm not a shameless plug, but I think it's a relevant service that we've added on that's, that is trying to assist with that.
[00:40:33] Haydn: Yep. So separate to, you know, our qualifying step separate to the, the full detailed estimates, we run a procurement service as well. So it's, they're called procurement packs. And on the project we will estimate every individual trade scope and quantify it for them. Then have a reference to the colored plant, to the plants.
[00:40:55] Haydn: And then so the electrical pack, the plumbing pack, the painting pack all measured for [00:41:00] them. And then the builder can then issue those and say, there's all the numbers. Please quote on that.
[00:41:06] Matt: I've got one extra thing you should add in. And I did this for the first time the other day. So I was creating an AI bot through Gemini, and I uploaded the interiors, the engineering, the plans, the working drone to specification to schedule, and said, can you spit out all the notes for the plasterer?
[00:41:22] Matt: Yeah. And it gave me a dot point of everything they need to worry about in this. Yeah. Not only that, it actually pulled out contradictions within the, the scope saying, well, it says here that it's got a P 50, but it's also saying in that same place, it's got architraves, ask the architect which one it is.
[00:41:37] Hamish: Yeah.
[00:41:38] Haydn: So that's, that's right. So in terms of the brief and the scope and summarizing the plans and documents, yes you can use AI to create a summary, but in terms of quantifying in relation to the plan, um, at this stage. Uh, I think you still need, um, yeah. Human interpretation about that. Do you, do you, are you, and so that's what we do.
[00:41:53] Haydn: Yeah. And then we use those separate to the, to the actual full estimate. And then the builders can start engaging their [00:42:00] contractors with that information. Or you can use a platform like Built Grid, which those documents go out to the general market, and then the general market can respond to those as well.
[00:42:09] Haydn: So
[00:42:09] Hamish: yeah,
[00:42:10] Haydn: it, it is creating some parity in pricing and a bit more control over the numbers. And then the benefit for us as an estimating company is we start to see those quotes come back in. Yeah, yeah, yeah. We relate them back into our database and then data gets refines, refines our actually think that, I mean,
[00:42:26] Hamish: I think that's, that's a, that's an incredible service.
[00:42:28] Hamish: 'cause if you think about it, say My plaster, for example, um, is picking up these drawings. He might be looking 'em on his phone. He might be looking on his, you know, laptop. Yeah. Mm-hmm. And he's just, oh, I think that's, that many square meters are alright. That's what I think it is. Yeah, but if you can go, just quote off this, this is, here is half a dozen pages.
[00:42:46] Hamish: This is all of your scope. Here's the takeoff. Can you just please confirm the quantities?
[00:42:50] Haydn: Yeah. So plasters would have ceiling areas, wall areas, wet areas, external corners. Yeah. Square setting if required in linear meters. All quantified [00:43:00] form a colored layout in the plan that shows where those areas relate to.
[00:43:03] Hamish: And then if we're just relying on their quote based off that information, if there's anything outside of that which happens on site and it's a legitimate variation for them.
[00:43:12] Haydn: they still have to take responsibility for the quote. Yes. That's on the, and I,
[00:43:15] Matt: one thing I had about Trey's quotes, oh, it's only valid for 30 days. Like, fuck, come on guys, we, the building, you know, the build's gonna start in 6, 8, 6 to eight months or apart. Know you should warrant that quote for the length of that project.
[00:43:26] Hamish: So, you know, one of the things that we're doing now is. Pla plastering ISS a great example. So we know we're getting a price here and we always check it again before we go to contract. Yeah. And we say to them, alright, we're starting here. We're expecting you to be on site in the next eight months. Yeah. So in eight months time, can you look into your crystal ball and maybe just add a little bit of something to that?
[00:43:48] Hamish: 'cause at, at eight months time, we are not talking about any price rises. Mm-hmm. Like that, that's completely fixed. That's the number that we are gonna, that we're gonna pay you. Yeah. And if, and if you don't like [00:44:00] that, at that point in time, we're gonna have to go back out to the market.
[00:44:02] Matt: And it's, and it's only fair.
[00:44:03] Matt: Like we both like, it's fair on us, it's fair on them, it's fair on the client because we can't have three layers of a contingency on it. Otherwise that's what inflates pro, uh, the projects more than ever.
[00:44:13] Haydn: Yeah. That's price, price pressure already. Yeah. And we're actually
[00:44:16] Hamish: finding that our, our trades are like, you know what, I'm comfortable with this price now.
[00:44:19] Hamish: Yeah. And I'm comfortable with it in eight months.
[00:44:21] Matt: And I understand COVID was a bit different when people were copying him weekly at some point. Yeah. But I did have a question here, and you've kind of answered it in the whole, what we were speaking now, 45 minutes. How do you manage, uh, how do you manage risk inside an estimation?
[00:44:33] Matt: You've kind of answered it with your whole process.
[00:44:36] Haydn: our process is so robust, you know, like, like, you know, you've used this a couple of times. delivering an estimate is more than just datas and pretty models, right? It's not just numbers and models, it's, it's, it's gotta have a really robust system.
[00:44:51] Haydn: So there, we, internally, we have 462 quality control checkpoints by the time you get your first draft. and then our [00:45:00] relationship with the builder, it's a collaboration. There's lots of discussion. There's multiple meetings, there's multiple revisions. I think there's no other way to, to provide a service.
[00:45:11] Haydn: We do and manage that risk, Matt, unless you've got a really robust system where there's a lot of dialogue and and collaboration.
[00:45:18] Matt: Future of estimating, I think it's also rapidly evolving.
[00:45:21] Matt: I think two things in, we're gonna play a big, uh, they're gonna create change in the way that we estimate projects is one is ai, but it's gonna create disruption to every practically job out there.
[00:45:31] Hamish: Yep.
[00:45:32] Matt: Two is 3D modeling. Do you wanna talk about those two and if you guys are doing anything on that, if you can, if you have anything to offer.
[00:45:38] Haydn: Yeah. Well, I am actively testing new softwares as they come onto the market, so I'm lucky enough I've got a team that I can put. Put some people onto that. So we've, we've researched probably about 12 different softwares as they come onto the market. Some of them have got AI measuring, um, and what they do is it's basically character recognition.
[00:45:59] Haydn: So it'll [00:46:00] recognize what a door looks like, it'll recognize what a wall type looks like, and it'll go sweep through and make auto assessment. So I'm seeing that come in, uh, not utilizing any of that yet. Yeah. 'cause I'm, I'm not seeing the efficiency,
[00:46:11] Matt: to be honest. Wait till it's been dialed in a lot more.
[00:46:13] Haydn: Yeah. So it's gonna go that way. Um, and, and, but to what level it goes, I don't know. Um, I think that the project home builders, they'll adopt it because it'll be easy
[00:46:28] Matt: and they can create their own kind of, but doing
[00:46:30] Haydn: a renovation on a. Passive home on the side of the hill.
[00:46:34] Hamish: Yeah,
[00:46:34] Haydn: I think it, it's got like any AO that we currently use, I think everybody that's trying to use it in some form or another knows you can't depend on what's gonna be produced.
[00:46:43] Haydn: Yeah. There's always gonna be interpretation. So I think that that my service will, will have to adapt and change, but I think we'll still be relevant because you'll need that professionalism to adapt and, and interpret what the output is.
[00:46:56] Matt: And AI shines new so people are jumping on it, but understanding that [00:47:00] like certain, yes, it's going to eliminate certain jobs in our industry.
[00:47:03] Matt: Mm-hmm. As you said, it can't eliminate everything. Like there's no way, like maybe I'm naive, but there's no way I can see as your example. Is that a renovation on a hill being a passive house? Yeah. AI can spit it out. Like maybe it might, I don't, but that's, you know more about
[00:47:17] Hamish: it than me. I mean, isn't ai, this whole learning model and the fact that we're talking about a very specific individual project, like
[00:47:25] Matt: it's a language model, AI's been around forever.
[00:47:27] Matt: Like we've got Siri on our phone. People just think AI is this brand new thing that's come outta nowhere. Like we've, it's been around forever. Well, not forever, but for a longer period than most people understand. But the models that we're using with chat, GTP and Gemini, their language models, what most people are now spitting out in their social media, and you can clearly identify when they've used it.
[00:47:45] Matt: But I, it's a super evolving process that's far beyond my knowledge with Yeah. With this backend of how, how it might work. I can, I can see it somewhere in our construction helping with our schedules. I can see maybe at some point that it just [00:48:00] will out be able to really quickly recognize this is how many Downlights this is, how many PowerPoints.
[00:48:03] Matt: Yeah. This is how many as account,
[00:48:05] Hamish: as accounting tool.
[00:48:06] Matt: Yeah. Yeah. I, I think those sort of things I see. I don't see it being you. There's all, like if you as a client or you as a builder wanna rely on AI giving you your estimate, fucking go for it. But I ain't doing that.
[00:48:17] Hamish: What about modeling 3D modeling?
[00:48:19] Haydn: Well, that's just gonna become standard.
[00:48:21] Haydn: Yeah, that's it already is like that. And the, the architects, when they design a project, they, it's, it's in a 3D It's a 3D model. It's a BMX model. It's already, there's basically, it's already there. So how that relates to the builder, um, it's not, it's not asce, it's not readily accessible to them at the moment.
[00:48:39] Haydn: Um, so you have to engage somebody to create that model.
[00:48:42] Matt: Having, so I've used it for like, oh, seven years. The, like, alter, alter Rico, give us a BIM X model and you fight through it. It's, it's a different one. It's not a construction model, different model. It enables you to have a very clear idea. 'cause the common thing I hate is when you get a set of plans and some of the elevations aren't there because it's juts in and out.
[00:48:58] Matt: This allows you to fly through it. I think you are [00:49:00] talking,
[00:49:00] Hamish: you're talking about a model for like a conceptual model for someone to like say, oh, hang on, there's a, there's some, there's some timber on that wall that I didn't quite pick up on. I think what you are talking about is actually using the model to then spit out illa quantities.
[00:49:14] Hamish: Surface areas. Yeah.
[00:49:15] Haydn: And how to create efficiencies in construction. Correct.
[00:49:18] Haydn: So a lot of the models that are currently produced or accessible, they're actually more for visualizing Correct. For the designer and the homeowner to walk through. What we are doing is we are creating models, but it's just purely a fly through on the structural.
[00:49:31] Haydn: Yeah. Like there's no, there's no sinks. So there's no mirrors. Yeah. It's just a 3D model of where the, where the steel meets the, the wall and where, how that connects to the footing. Uh, and you can fly through that. So that is the tool that actually goes to site. And then when you're standing there you go, right.
[00:49:49] Haydn: Where does that thing, so this is
[00:49:50] Matt: something we had for a house. This is my own house. This is very early on and I know a lot of people can't see this potentially, but we were able to, like, this was just him, James playing around if I can even work out how to use this [00:50:00] myself. But we were able to go complete envelope, uh, note framing something simple like this to start to roughly understand or how that, how are we gonna get that in?
[00:50:09] Matt: Yep. What? Like, and that didn't take the architect much time. Yeah. But if you can especially get the engineering, I think it gets to a point where the architect should be uploading the engineering to make sure their heights move, work with beams Yeah. And things. Yeah. So that's,
[00:50:20] Haydn: that's exactly what we are doing.
[00:50:22] Haydn: Yeah. So we're taking the architectural plans and the engineering plans and we are creating, using, um, the BIM X tool. Yeah. To create the 3D model that looks similar to that. And then, you know, that goes to the builder so the builder can use it, it makes 'em look professional, looks like they're across it when they're having their negotiation with their clients.
[00:50:39] Haydn: Um, and then it translate to actual practicality on site and it helps us internally in our estimating process. 'cause it gives us another look at it. 'cause to now we're, we are measuring on 2D, so that 3D model's just gonna make things more efficient for everybody.
[00:50:50] Matt: And, and, and jobs are getting complicated.
[00:50:52] Matt: So it just, if you're like, oh yeah, how would you actually build that? You think through your ahead and it, this is a full 360 before we wrap it up, this is why negotiated [00:51:00] tenders are so much more important. Imagine just throwing that, like if you're doing a competitive tender, no one's using those things.
[00:51:05] Matt: Yeah. No one's gonna use those tools where in a negotiated tender you're actually going through solving the problems. Yeah. Forward and all that information. Yeah. You're probably gonna spend a extra few thousand dollars to get to that, that point of the process. But you are actually saving so much money on site.
[00:51:22] Matt: Yeah. For efficiencies and saving you potential variations in a cost you a fortune 'cause you've already gone too far.
[00:51:28] Hamish: That's it. How do people get in contact with you, Haydn? Um, I mean as someone who's used you before and it's an absolute game changer. I mean, we have an internal estimator, so we're kind of.
[00:51:37] Hamish: It's, we're kind of a bit of a hybrid, bit of a hybrid approach, and it still works for us. Mm-hmm. So, you know, even if you are a builder out there that have an internal estimator, price plan still offers value there because it actually just expedites that whole process.
[00:51:50] Hamish: Mm-hmm. So how do people get in contact with you? Um, website.
[00:51:55] Haydn: Yeah. Visa plan.com au. And you're on TikTok is,
[00:51:59] Matt: are you on TikTok [00:52:00] as well? I'm not on TikTok.
[00:52:02] Haydn: Uh, on all the socials where we are there, we're getting a bit more present with that. you know, that's why I talk about estimating is, is, is a whole ecosystem.
[00:52:11] Haydn: Um, and we've got people like you that are sort of this hybrid model where we do the grunt work, but then your internal team takes over. We've got other guys that use us that they just want a takeoff on block. So I've got a guy up in the Gold Coast. We just do concrete and block for him. That's all we do.
[00:52:27] Haydn: Wow. But he's doing what
[00:52:28] Matt: every trade should be doing.
[00:52:30] Haydn: Well, he's a builder, so he's got his internal team, but he just engages us to do the takeoffs and the quantities, and then he uses those to engage in some contracts. That's another way the majority of people though, what we love is we just know that estimating is qualifying, putting in preliminary agreements, detailed estimates, assistance with procurement, 3D models.
[00:52:52] Haydn: And then the other thing is that we do is we set all your project data up into whatever software you're using as well. So it's not just [00:53:00] a bunch of paper that doesn't translate. We actually have another step where we set all that data up into your project management account so that it's actual tangible information right through the project.
[00:53:10] Haydn: So it's a whole system.
[00:53:11] Hamish: Yeah. So, so just to, just to, just to double down on that, you'll remap your cost centers or cost codes to whatever cost centers or cost codes the builder is using.
[00:53:20] Haydn: Yes. And it's amazing. I love, it's another education moment for me. The difference between people understanding what a cost code is.
[00:53:29] Haydn: If anyone wants an education, gimme a phone call. Yeah.
[00:53:32] Hamish: And do you know what I'm still, I don't use, I don't use them really? I still get You don't use
[00:53:35] Matt: them? Not really. Really? No. We just purchased lot everything now.
[00:53:38] Hamish: No, we purchase order everything too. It has to be allocated to a cost code. It's gotta be a to a cost code though.
[00:53:42] Matt: As in what sense? Like, we have it limited to like, as in on your backend to zero
[00:53:46] Hamish: No, through. I'm gonna let Hay explain. Yeah. Maybe do this off you explain it, man. 'cause I'm gonna butcher it. I I am, I was there. Yeah. And Dan for so long was like, mate, we need to get things into the right format. And it wasn't until that I, I just had [00:54:00] this aha moment.
[00:54:00] Hamish: I'm just like, oh, do quickly explain it. Why fuck was I not doing? Because maybe I'm doing
[00:54:04] Matt: it. I just maybe don't call it the same thing.
[00:54:05] Haydn: Maybe. Um, okay, so what, what a lot of builders do is, is when they're estimating a project Yeah. You have the estimating categories. Yeah. Right? And, and people get confused and think that those estimating categories are their cost codes.
[00:54:18] Haydn: Yeah. They are not. Because when you're estimating a concrete slab, you are gonna have the machine to dig the trenches. Yep. That's Earthworks. Yep. That goes to cost code Earthworks. Yep. Yeah. You have the black plastic that goes underneath, that goes under, that could come from the landscape supply company.
[00:54:36] Matt: Yes.
[00:54:36] Haydn: You have Rio. That goes to Rio Supply. You have concrete, you have pump. So in that estimating category, you might have a hundred items in that category, but they're gonna get refined into the supply code. Yes. And then that might be reduced down to six cost codes.
[00:54:54] Matt: So we can't, yeah. So Wonder Build that we use allows you to kind of click on the side preliminaries and change it all.
[00:54:59] Matt: We're a [00:55:00] little bit different 'cause we go a concreter, you supply and do all that earthworks machinery pump. So we have a very, we're very different where it's like supply and install like it is, they do everything. Yeah. Well,
[00:55:12] Haydn: it's still a cost code still, but it's just easier, it's easier for you to balance those out because it's, you can see then overall
[00:55:17] Matt: tracking
[00:55:17] Haydn: versus that.
[00:55:18] Haydn: Yeah, yeah, yeah. And if there's a variation or if you have to get on site and dig it, get in the trenches, which does that happen, Matt?
[00:55:24] Matt: Uh, yeah. All the time in my rm, that extra own, do you own a
[00:55:29] Hamish: pair of steel toe
[00:55:30] Matt: boots? I actually do. I had to pull 'em out the other day. I had to find them. But if you
[00:55:33] Haydn: have to pull them out and you have to go on site Yeah.
[00:55:36] Haydn: Then your time on site would get allocated to that same cost code. Yeah. And it would show as an overrun against the subcontractor. And it should, and this
[00:55:43] Hamish: is, this is, this is the things that we are learning. If I'm going on site and I'm doing something, like yesterday, I dropped off form work Yeah. To, to, like, I, I loaded the trailer out and dropped off form work.
[00:55:54] Hamish: I should be
[00:55:55] Matt: Costco in that.
[00:55:56] Hamish: I should be allocating that time to that [00:56:00] particular cost code within, within. So my team do that. Yes,
[00:56:02] Matt: we have cost. Yes. So we do. I just don't, I just, I could. Just the way my spreadsheet or not my Wonder Builder's set up. So it does work. Yes. It's, it is
[00:56:10] Haydn: just another layer of education that builders, um, struggle to take the time to learn.
[00:56:18] Haydn: Yeah. 'cause they're time pressure, right.
[00:56:20] Matt: You, you work with Wonder Builder a bit, don't you? Yeah. Yeah. Why don't you do a, like, I know Wonder Builder's starting to do more, uh, webinars. Like why don't you do a whole webinar on it, that exact topic, cost coding.
[00:56:29] Haydn: Um, we could easily do that. And it's good. 'cause when the Wonder, wonder Build Now have cost code allocations. Yeah, yeah. Some of the other softwares that are out there don't, oh, they, I I they just have estimating categories.
[00:56:39] Haydn: Yeah, yeah. Yes. And they don't differentiate to cost codes. So it is way better when you really wanna know where your numbers are on a project. Yeah. It's way more efficient to do, it's the
[00:56:48] Matt: best program by mile. And we are gonna get them on at some point, of course. But yeah, we do have to wrap this up, Sam.
[00:56:53] Matt: We are literally just hitting now on the dot. So. Perfect. Thank you for coming on, Haydn. Thank you for coming along. Thank you. Pleasure. Cheers. You guys
[00:56:57] Haydn: were gonna be part of the road show.
[00:56:59] Matt: We
[00:56:59] Hamish: [00:57:00] were, but we had babies. But you had babies. We had babies. Babies. Thanks Haydn. Pleasure. Cheers. Awesome.