Often producing a construction cost estimate is the most dreaded part for a builder or contractor. They take a lot of time, so they are usually tackled at night when there is a spare moment. Done like this they usually end up more of a ‘guess-timate’ than an accurate estimate. This can lead to quotes being too high and losing jobs or they are too low and end up eating into your profit margin. Either alternative is not good for business. However, the best way to estimate construction costs saves you time and ensures your profits.
What you need to know
When it comes to how to estimate construction costs there are a few things you will need for an accurate estimate. The project specs, design, and drawings will help you determine the scope of work, the products and materials to be used, and the size of the project. Having a proposed start date will also help with providing accurate costs. If the project is scheduled to start in three years’ time, then inflation will need to be calculated into the costs. From the project’s information you can put together a quantity takeoff. This entails counting individual products and taking measurements. A house paint will not require as big and as detailed takeoff as the construction of an apartment building would. Now that you know the cost of products and materials, you need to calculate labor costs and your other soft (indirect) costs.
Now that you know how to estimate construction costs, you need to learn how to present them. The project document package will contain a due date for the estimate and sometimes they include how they want the estimates presented. Whether the package has specific presentation instructions or not, it should always be professional looking, accurate, clear, concise, and lead the reader logically to the conclusion that you are the answer to their need.
The cost estimating secret
The secret of how to estimate construction costs the best and easiest way is software. By using estimating and construction management software you produce takeoffs 80% faster than manually. They have checklists to make sure you don’t forget any hard or soft costs, pricelist databases can be uploaded, templates that can be customized and saved, document storage keeps everything handy, and cloud-based platforms are accessible from any smartphone or computer, wherever internet service is available. The benefits of estimating software don’t just stop at providing fast takeoffs and professional estimates, because there are many other features that can improve your business too – project management, lead generation, accounting, profits, and scheduling, to name a few.
With everything that construction estimating software can do for your business, and your personal time, why not try it for yourself. Buildxact offer a 14-day free trial of their estimating and construction management software, or book a demo today. Now you know how to estimate construction costs quickly, accurately, and without fuss, don’t waste another day losing bids or money on bad construction estimates.