To estimate the construction cost for a small or a big project, you have to be accurate. The right estimate always guides the contractor throughout the project to make the right decisions. This helps to balance everything from budget to timelines. Now, it is very important in this fluctuating market to rely on precise cost predictions. Modern estimates consist of accurate quantity takeoffs and are based on current market rates.
This guide walks you through a professional process to work on residential, commercial, or industrial projects. It is important to implement every step with care and complete the projects under budget. Inflation has caused disturbance in managing the project funds. That is why contractors now mostly rely on professional opinions.
THIS GUIDE SHOWS HOW TO ESTIMATE CONSTRUCTION COSTS IN A 7-STEP PROCESS AND RESULT IN ACCURATE BUDGETING!
7 Steps guide to accurate budgeting
Step 1: Define the Project Scope
Cost estimation starts with a clear project scope.
Clarify what you’re building
Gather all available documents:
- Drawings and specifications
- BIM models (if available)
- Bid packages, RFQs, and addenda
- Design narratives and performance requirements
Professional estimators review the project documents to understand what is included and what is not before they estimate anything. This way, the construction cost breakdown gets easier.
Key questions to answer:
- What is the building type?
- What are the key systems?
- Are there any specialty items?
- What is the timeline?
Set assumptions and exclusions
No set of drawings is perfect. Write down:
- Assumptions
- Exclusions
These factors help you make the perfect decisions later.
Step 2: Perform a Detailed Quantity Takeoff
A quantity takeoff is a process of counting the materials and items required from the drawings. Professional Construction Takeoff Services are developed on the basis of accurate measurements. They are based on:
- cubic meters of concrete
- square meters of tiling
- number of doors
Break the project into trades
Organize your takeoff by trades such as:
- Sitework and excavation
- Foundation and structure
- Exterior envelope
- Interiors
- MEP
Check, then double-check
Accuracy must not be compromised! So, it is important to check everything twice. You can check quantities with another team member. This way, different factors can be compared.
Step 3: Apply Current Costs
The next thing is to attach unit rates.
Source accurate, current pricing
You can get unit costs from:
- Cost databases and cost books
- Supplier and subcontractor quotes
- Your company’s historical project data
Include labor
Use the right labor construction estimating formulas and get precise results. Unit costs should consider:
- wage rates, benefits, productivity
- Equipment rental or ownership costs, etc.
Step 4: Add Indirect Costs
There are various indirect expenses that are necessary to move on with the project, such as:
- Site management staff
- Temporary utilities and facilities
- Site security and safety measures
- Small tools and consumables
- Office rent and utilities
- Admin and accounting staff
- Insurance and licenses
- Software subscriptions and equipment leases
Step 5: Consider Contingencies
A contingency is an extra amount added to the estimates. The purpose is to handle the extra cost that can arise due to unexpected changes, etc. Almost all contractors add 10–15% extra cost to the estimates.
Step 6: Use Tools
You must use modern estimating methods and advanced estimating software. It helps you to:
- Link directly to BIM models for dynamic quantity updates
- Pull pricing from cost databases automatically
- Generate reports and schedules of values for contracts and billing
Step 7: Review the Estimate
You need to check the estimate at every step. From preparing to sending bidding proposals, one must consider every factor. Expert Construction Cost Estimating Services are delivered carefully by reviewing every step. It is better to check various things before sending the proposal:
- Have a senior estimator or project manager review assumptions, quantities, and markups
- Verify all major cost drivers carefully
- Ensure the estimate aligns with the project schedule and procurement strategy
Can you save budget with a reliable Construction Estimation Company?
Yes! It is highly recommended to seek help from a reliable construction estimation company, as they are well-versed in all aspects of the process. They have experience in working on simple and complex construction projects. That is why estimators can handle all types of situations and complete the project under budget. Most of the contractors ask estimators to apply value engineering methods.
However, such methods help to cut costs and save the overall budget. If you also want to compete in this contemporary industry. You have to be quick and accurate at every step of the estimation process.
Final Thoughts!
To estimate the construction cost, you need to complete the steps carefully. One must be a pro at technical and non-technical things. Make sure to make good use of historical past data. Take a good start with accurate project information and then apply the right methods. Use advanced estimating software like PlanSwift to speed up the process and enhance the precision.
