Tips for delivering accurate construction estimates
Estimating in construction isn’t easy. Keep these tips in mind to create accurate estimates, win more jobs and protect your profits.
How do you ensure you provide accurate project estimates?
This is a question that’s tough to answer in any industry, but it’s especially difficult in construction. There are so many varying factors to consider for every project, making each estimate unique from the next.
As a builder, you know the importance of estimating accurately, and with fluctuating material prices and a competitive building environment, it’s only natural to worry about whether your bids can win. Estimating too high risks losing the job while estimating too low jeopardizes profits and your company’s future.
Although it may seem like a lose-lose situation, it doesn’t have to be. Implement these construction estimating tips to ensure you’re providing the most accurate estimate possible.
1. Make sure your takeoff process is top notch
In your takeoff process, you should have a detailed outline of everything you’re going to need for each job. Investing time in this will save you time and will reduce the chances of making an error down the line.
Using a takeoff software is one of the best ways to start your construction cost estimation at the beginning of a project. When choosing a software, you should look for:
- A work breakdown structure
- The option to use more than one database
- A large report menu
2. Keep your cost-estimating catalog up to date
It’s difficult, if not impossible, to create a construction cost estimate without the use of a database. Over time your database should continue to grow and evolve, making it easier to create estimates for new projects. You can also use your database to assign crew and production rates to each project variable.
Your construction database plays a crucial role in forming an accurate estimate, so be sure it’s always up to date.
3. Create a checklist to keep projects on track
Making a checklist or using a construction estimate template with a built-in checklist of the most important steps will ensure organization. Plus, with a checklist, you’re less likely to forget important project details.
Using a templated list is convenient, so you’re not beginning from scratch each time. You’ll have your basic list and then you can add any necessary items that are job specific. Implement a construction management software like Buildertrend to make building and using templates easy!
4. Know material costs and be prepared for fluctuation
Today especially, materials and appliances can be hard to come by, and the costs change constantly. Keep this in mind when you’re building your estimates. You may also want to consider questions such as:
- Is there high demand for certain materials?
- Are certain items or appliances backordered?
- Are there any limitations for products?
- Does this project require any custom work?
Staying informed on these topics at the start of a job will help inform your estimate.
5. Anticipate risk and factor in its costs
Your construction estimate should include costs for things that could possibly go wrong. No one can tell the future, but a good way to predict these unexpected costs is by looking back at previous projects. This will give you a good idea of what could potentially happen.
Anticipating these costs will allow your client to prepare financially and covers your end if something goes wrong.
6. Assess larger costs more closely
When forming your construction estimates, you’ll want to center your focus on the pieces of your job that have the highest percentage cost. Your scope of work, number of tasks, labor pricing and material costs should take precedence when building your estimate. Looking closely at these items will help you to prioritize and cut costs in other areas if necessary.
7. Remember costs outside of labor and materials
In addition to the attention to detail you give your larger cost items, you will also want to keep in mind the operation costs that will fall outside of labor and materials. For example:
- Operation and administrative
- Architect or engineering
- Land acquisition
- Legal services
8. Determine your equipment needs
Some projects are bigger than others and will require more equipment. Having the proper equipment for the job will ensure the job is completed efficiently, but more equipment means more money. Don’t leave out these extra costs. The best time to factor them in is when you’re building out your project estimation.
It’s also a good time to consider whether it makes more sense to rent or buy the needed equipment. Is it something you will use regularly that will pay off in the long run? Look at the pros, cons and costs from all angles to help you decide.
9. Factor in your subcontractor and specialty labor costs
You more than likely work with several subcontractors on multiple projects every day. So, you probably have a good idea how much each one will charge for a certain project. Take some time to consider which subcontractor is best for each job and how their cost will factor into your overall construction estimate.
And don’t forget about specialty labor costs. Working with specialty laborers or craftsmen may cost more depending on their trade or skill.
10. Only take on jobs that will bring success
This should go without saying, but only provide project estimations for jobs that will bring success to your business. By now you know which jobs will be profitable and which ones won’t. There’s no need to take on every job that comes your way. Being able to determine the right kinds of projects allows you to be more selective, which will ultimately create a more accurate estimate.
Create accurate estimates with Buildertrend’s construction estimating software
Looking for a better way to build your construction estimate? Buildertrend’s construction estimating software is here for you. Manage your price breakdowns, and see the potential profit for each job.
Schedule a demo today to see how Buildertrend can take your construction cost estimating to the next level.
6 ways to get more remodeling leads
Want to learn how to get more remodeling leads? With these six best practices for lead generation, remodelers can score some easy wins and convert leads.
Our top 3 features used by specialty contractors
Find out which top Buildertrend features help our specialty contractors finish projects on time and on budget.
How do you measure cash flow in construction?
Managing cash flow in construction can be difficult. Check out these expert insights for how to best maintain balanced finances.