The estimate should identify all materials needed for the project, as well as the expected prices. List all of the materials costs for each phase, and then provide a total estimate.
Using the project scope to determine what needs to get done and when, draw up a construction schedule or construction timeline that breaks down the project into multiple bite-sized phases. This is a relatively simple process involving five basic steps.
Once you have all of this information, you’re ready to build your construction estimate.
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How to create a successful construction estimate It's sometimes tough to remember all of these items, so consult with past projects to see where you spent your money, and discuss this category with your crew so they can identify other expenses you may have forgotten. OverheadĪ construction project will feature lots of miscellaneous overhead costs, from your own salary as a construction manager to temporary on-site facilities to permitting and fees. You should also include costs for wear and tear - even though it may not cost you money out of pocket in this project, by including it in the estimate for construction, you will set aside money for the purchase of new equipment down the road. But jobs that require renting or buying new equipment will result in significant expenditures, and that should be noted in the final project cost. If you already own all the equipment you need and just need to carve out some space in the budget for fuel and maintenance costs, your expenses in this category will be relatively minor.
EquipmentĮquipment may take up a significant portion of your budget, or it may be relatively minor. Don't forget to factor in subcontractors as well. Provide a detailed breakdown of the man-hours expected for each phase of the project, and include some wiggle room in the construction workflow in case overtime or extra emergency workers are necessary due to change orders or unforeseen challenges. Labor will eat up a large chunk of your budget, so any mistake in this category will cause a major miscalculation in terms of the overall cost. To be safe, budget for higher-than-normal prices to ensure an accurate quote. The last item, the price, is the most difficult to predict due to fluctuations in cost that are outside your control. MaterialsĮvery construction project requires materials, so compile a detailed list of every type of material associated with each phase of the project, as well as the quantity of the materials needed and the expected price of those materials at the time you purchase them. When it comes time to create your construction estimate, generally all costs fall into four main categories. Therefore, construction managers should devote significant time and energy at the outset of the project to properly flesh out all of the costs associated with a project.Ĥ construction elements to factor into your estimating As a result, this is one of the most important parts of the construction project, because a badly-done estimate will result in budget overruns and possibly even delays, leading to evaporating profits and unhappy clients. A good construction cost estimate will provide both the construction manager and the client with an idea of the cost of the project so there are no surprises when the project is completed. Overview: What is a construction estimate?Ī construction estimate is a document that lays out, in detail, all of the costs involved in a construction project. Here’s what you need to know about estimates, and how to do one correctly for your next project. By becoming an excellent construction cost estimator, you will avoid those budget overruns that cost your business.Ĭonstruction estimates also make construction project management easier, because you can be confident that the tasks you are executing have been laid out in the budget and will get the project closer to completion without jeopardizing the bottom line. When you’re talking about cost control in construction, you’re talking about getting an estimate done right at the start - not managing finances midway through, which is a recipe for disaster. It is possible to keep your costs under control, and therefore protect your profit margins. Add to that the fact that clients love making changes on the fly, and it's easy to understand why keeping a project on budget is next to impossible in this industry.īut it doesn’t have to be that way. Construction projects are complex operations, and people have a tendency to be overly optimistic about their success. Budget overruns in construction are practically a guarantee these days.