How to Estimate a Construction Project: Main Tips for Contractors and Estimators

The process of estimation of a construction project is very important because it helps not to violate the limits of budgeting. That is why accurate planning is required for initial and other building phases. Performing construction projects is a really difficult procedure with a set of rules and a number of stages to take into account. 

Building estimating software – Conwize (https://conwize.io/) can take some of the heavy bouncing, ups & downs out of these stages, but it’s often essential to know the guidelines for labor and supplies per project. Speaking about digital tools for correct estimates and risk-free financial predictions, it is better to choose one that is easily integrated into other systems, CRMs, cloud databases, etc.

What Are 4 Basic Groups of Costs to Estimate?

Moreover, customers like unexpectedly adding changes during the process. Clients should retain professionals to help them in evaluating the costs so they can meet their budget. All costs are divided into 4 basic groups.

  • Supplies;
  • Machinery;
  • Overhead;
  • Labor.

All the costs should be carefully estimated with the help of manual estimators’ work and algorithms of special-purpose software. Note that the best approach today with the ever-changing market of digital solutions is to make the cost estimating process maximally automated.

More Important Factors for Successful Cost Estimating

Among other factors of the construction cost estimate that is close to the most ideal financial forecasting picture are accuracy of the calculations, well-balanced budget plans, and great communication with all the parties like subcontractors and suppliers.

Here is a list of helpful recommendations for result-driven contractors in the construction sector and their estimating departments:

  • Write a list of all necessary supplies and specify the project stage for each item. It is also essential to understand the number of materials required and the expected.
  • Don’t forget about fuel and maintenance costs. 
  • Pay attention to the subcontractors too.
  • Create a schedule
  • Determine labor hours for all project stages.
  • Add overhead expenses for the final project estimate
  • Try not to be very optimistic about creating the estimate.
  • Discuss all the stages and their budgets with your team.
  • Both clients and employees think about the price of a project.
  • Analyze previous successful project estimates.

Correct estimates always win new projects and business for firms. What influences construction estimating? The individuals who are liable for estimating procedure, as well as future costs, influence the results, of course. 

If you perform a proper estimate that a customer is satisfied with, it is possible he will want to suggest you one more project estimate. Professional consultants are not cheap, but if they can perform the estimates right, they will save an enormous amount of money in perspective. 

It is impossible to present all the recommendations, tips and hacks at once. But remember that your final result directly depends on the initial construction stage. That is why cost estimating should take place accurately and 100% professionally. 

Do Small Mistakes in Estimates Matter When It Comes to the Overall Cost Estimating?

Small estimating mistakes may not influence much but big errors such as inaccurate calculating or using the wrong units of measure can become a great failure and spoil the reputation for a long time. So, check everything twice.

Remember that tiny errors in your financial forecasts are about ruined budget plans, improper profit margins, and overestimating or underestimating as well. You and your clients can wait for awesome results. But finally, one of the parties can stay disappointed when it comes to expenditures or profits.

There are a lot of methods to categorize expenses, but high-skilled estimators traditionally classify them into direct and indirect costs. Owners usually work from a budget, which is the amount they hope the building will cost. Contractors must specify how much money is necessary for the building really. That is the construction estimate.