In short:
- Construction cost estimating involves adding up direct costs (materials, labor, and equipment) and indirect costs (permits, insurance, and utilities) to budget projects and bid profitably.
- Estimate types include preliminary, plinth area, cube rate, elemental, and detailed itemized breakdowns.
- Accurate estimates come from cross-checking labor, subcontractor, and material costs while factoring in price changes and contingencies.
- Common mistakes: Underestimating labor, overlooking supply volatility, and skipping reviews of assumptions.
- Estimating software like On-Screen Takeoff® with Takeoff Boost™ and Quick Bid® makes takeoffs faster, reduces errors, and improves profitability with reusable, organized data.
What is Construction Cost Estimating?
Estimating the cost of a construction project affects the money you will make. There are no shortcuts to making a profit. Mistakes can be costly, even after the job is done.
Many decisions must be made when you estimate construction costs. Correct estimates keep your work on time and on budget. It is worth the resources to ensure the highest profit.
As a construction cost estimator, you should learn the basics and use estimation software to do the heavy lifting. This combo makes it quicker to submit bids, adjust to change, and turn a profit.
Types of Cost Estimates
There are several types of construction cost estimates:
- Preliminary: The idea of the cost based on limited information.
- Plinth area: Based on the external dimensions of the structure, including the foundation type, roof construction, materials, and finishes.
- Cube rate: Based on the total building volume.
- Elemental: The total cost broken down by elements such as structural frames and floor finishes.
- Detailed estimate: The most detailed. An itemized list of costs divided by trade, including labor, materials, and equipment.
How Do You Calculate Construction Costs?
Once you have the big-picture overview, gather every detail. Make calculations by collecting information such as:
- Direct costs: Cost of materials, labor, and equipment.
- Indirect costs: Cost of utilities, legal fees, permits, insurance, etc.
- Labor costs: Cost of paying your team, including wages, taxes, and overtime.
- Subcontractor costs: Cost of contracted work, including labor, materials, and equipment.
Accurate calculations require compiling and cross-checking each of these components.
Common Cost Estimation Problems
Common issues while estimating building costs include:
- Missed takeoff/inaccurate measurements: Even the best estimator makes mistakes when they are rushed.
- Not reviewing your work: Take your time and double-check your work.
- Material and supply cost volatility: Keep up to date on ever-changing prices.
- Underestimating labor: Estimate labor costs based on projected hours and include contingencies.
Learn more about common construction estimating mistakes by researching industry resources and case studies.
Why Use Cost Estimating Software?
Manual takeoffs are time-consuming and have a higher risk for error. Cost estimating and takeoff software like On-Screen Takeoff® with Takeoff Boost™ and Quick Bid® Estimating lets you work smarter, not harder.
These tools help you:
- Go from "find a project" to "submit a bid" in hours, not weeks.
- Cut up to 95% of takeoff time with AI-powered automated takeoffs.
- Handle change orders and updates easily.
- Prepare and submit bids faster than ever.
- Customize and save estimates for reuse.
- Submit more bids and win more projects.
Using preconstruction software reduces errors and saves time, improving your ability to win profitable jobs.
You Got This!
Cost estimating your construction project has many moving parts. They must all be cross-checked for accuracy. Think through each project stage and calculate both the obvious and the not-so-obvious. Avoid common mistakes, stay organized, and save time by using appropriate estimating tools and software.
You're one accurate cost estimate away from another successful bid.
See how On-Screen Takeoff with Takeoff Boost and Quick Bid can help you win more profitable work. Start your free trial today.
Keep Learning
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