It’s important to understand the difference between an estimate and a contract, and clearly communicate your intention with the client. A deeply researched and reasoned estimate will make sure you understand. Most project and payment disputes are the result, not of greed, but of misunderstanding. This means you can bill for and you can prove that it’s required and that it’s done. If you’ve really taken the time to count every lag bolt and account for every bit of formwork, you know every component of your work. One of the greatest advantages to proper construction estimating is the deep familiarity with the project you get as a result. You may have to carry that cost until the end of the job. Or, if you missed the labor burden on your employees, you still have to pay it. In fact, you may not be able to bill for it at all if it wasn’t in your estimate. If your estimate didn’t include renting a crane and now you realize you need one, it’s going to be hard to put the crane rental on the Application for Payment in a timely fashion. Knowing your costs up front at every stage of construction means you can bill for those costs as soon as they’re incurred. You can’t bill for work that’s not on the schedule.
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As your first communication with a potential client, a bid will provide a sense of your thoroughness, your attention to detail, your organization, and your transparency.Ī slightly higher estimate presented in detail and in a professional format will always be considered over a lower number scrawled in pencil on a piece of paper. And the bid reflects more than just the price you’ve set. This is particularly true in bid work, where the owner will consider more than one company’s proposal.Īccurate construction estimating will be the difference between winning the bid or not. The most important role of a construction estimator is to win work for the company. As a result, it’s critical that your educated guess is as well-informed as possible. If you guess too low, you don’t get the profit.
If you guess too high, you don’t get the work. You have to estimate the cost of building something that has never been built before. “Estimating” really sums up both the difficulty and opportunity of being a contractor. Read more: What to include in a construction budget And that calculation is the construction estimate. But the contractor has to determine how much the building will really cost. Owners typically work from a budget, which is the amount they expect (and hope) the building will cost. The estimate impacts all factors of a construction business Every bit of it must be accounted for, because if the owner doesn’t pay for it, you will. Temporary shoring, project accounting, equipment rental, insurance…the list goes on and on. These days, much of the estimating process can be automated using estimating software.Īn estimate will contain many factors not shown on the plans and specs, but still required to realize the building. In the past, estimators would do a quantity takeoff manually, poring over the drawings by hand.
Performing a material takeoff is a critical part of an estimator’s job, during which they use the drawings to count the amount of each material they need to build the project. This means it should include every single item on the plans and in the specifications. A good estimate accounts for every single expenditure associated with a project. In construction, estimating is the process of forecasting the total costs for materials, labor, and other expenses necessary to complete a building project. Level 4: Construction Document Estimate.The 5 levels of accuracy in construction estimating.The estimate impacts all factors of a construction business.