Estimating costs can make you or break you in the construction business. If you estimate correctly, you can make a nice little profit, but if you get it wrong, well, you can lose everything. There are so many areas where mistakes can be made, and even the most experienced construction managers can get trapped if they are not careful.
Here are 4 construction estimating tips to help you save money this year:
Settle on the plans with the customer
So many times, customers will hand a construction company a set of drawings for an estimate. However, drawings are very different than the details that are outlined in actual plans, and you will lose money every time you give out an estimate on drawings. This year, only give out estimates on plans and save yourself and your customers a lot of time and money.
Utilize the unit cost estimating method
Stick estimating can take weeks to complete and you don’t always have that much time to get an estimate back for a prospective job. In your rush to do it that way, you are going to leave things out and potentially cost yourself a lot of money. Instead, we recommend using the unit cost estimating method where you compile all the line items for the job and attach a unit cost to each line item. Total those numbers and then apply a markup. After you do it this way for a while, you will find that you are close to the same estimate as the longer way, yet it is only taking you a week to do the estimate.
Do not underestimate labor costs
Labor costs can put you over budget quickly, especially since it may take someone longer to do a certain part of the project than it would take someone else. Everyone is different with their experience level and how long they need to spend on a project. Specialty craftsman also have their own hourly rates that may be higher than what you originally estimated.
Talk to your material suppliers
Your material suppliers can let you know if they believe the cost of materials will be rising in the next few months. If you take a few minutes to reach out to your contacts, you may be able to save yourself thousands of dollars in the long run.
You will not always catch every error that you make when doing a construction estimate, but you can catch most of them if you follow these tips. Good construction estimating software can also be a helpful tool as it can let you see things that you are missing without having to go through everything line by line.
Call us at 407-316-8544 to discuss our project management processes with us in detail. Our construction management specialists are top of the line when construction project management is concerned. We’ve been involved in many central Florida area construction projects and we enjoy seeing the improvements we make to our beautiful area.