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Cost Estimating Baselines to Take into Consideration

The construction sector is not lacking in challenges most contractors face every day. They can take place at any stage of the building. Speaking about the pre-construction phase, the most essential is cost estimating. This process is based on four categories of costs to take into consideration. Additionally, the accuracy of construction estimates depends on other factors like the way of data processing, the quality of all the analytical research practices, etc.

One of the most win-win strategies is using modern technologies for automation and digitization of all the building operations including costing, estimating, and bidding. For example, construction quoting software can make a difference when it comes to the accuracy of all the financial forecasts, budget planning, and other pre-construction insights.

The best-matching digital tool should cover all four categories of costs. Among them are labor, material, overhead, and machinery costs. Do not forget to include rental and permit costing analysis to form the most accurate construction estimates. There are other tips for contractors and estimators to take into account.

Helpful Tips for Construction Cost Estimating

As can be seen, your win-win strategy should be built on two cornerstones from the very beginning – digitization & automation together with coverage of all the cost items for precise budget planning and estimating of your project timing, profits, etc. To improve your estimates even more, try other helpful tips. Estimate labor, supply, equipment, and overhead costs well through the following approaches:

  • A quantity takeoff is your priority. When you analyze your material costs, be ready to pay attention to all the prices for supplies. Sometimes your expectations about one figure but the real amount are different. The most precise takeoff is the way to improve your total estimate.
  • Create the most optimal timeline for risk-free scheduling. No project can be managed without some timing background. You will have deadlines from the client. But it is better to create your own timeline and move through the dates and phases you specify.
  • Motivate your team. Even if you attract subcontractors, you need to maintain a positive microclimate and high-motivate atmosphere in your company. Arrange regular meetings, and develop a unique policy for compensations, rewards, and bonuses. Play motivational games to achieve more corporate goals faster.
  • Use templates and e-format reports for your estimating process. It is much more convenient to use digital tools with template reporting sheets for data entries. Custom your templates to apply them from one order to another. For example, you can add some standing suppliers or subcontractors, and costs you are sure that they are far from ever-changing.
  • Less paperwork. Switch to paperless processes to have more accurate estimates. The rule is quite simple – the more manual work you have; the more risks of errors in reporting will take place. E-format reports, online spreadsheets, and communication & commenting docs in the special-purpose applications are great improvements to your workflows.

Do not forget to add machinery and rental costs for your final estimate. Overhead expenditures also should accompany your estimating report. Without this data, you risk overestimating your profit margins. For example, fuel or rental costs required for heavy equipment on the site can become one of the biggest budget items. Additionally, pay attention to accurate labor estimates. Subcontractors’ quotes, compensations, certifications, overtime payments, and other peculiarities should be taken into consideration.

But do not try to save money through inexperienced workers attracted to the site or low-quality equipment, materials, hardware, and software. Poor investments mean zero investments. Your contribution should be high-level and with the potential for long runs. Hiring professionals and purchasing high-quality supplies, equipment, and digital tools should be your number one strategy in the context of cost estimating and other construction phases.

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