How to Estimate a Construction Job?

Precisely estimate a construction job and streamline your projects! Every construction manager understands the need for comprehensive estimates. It helps to improve the flow of construction and prevents cost overruns.

But, estimation is easier said than done. There are numerous costs involved in a construction project, such as material, labor, and equipment, and they can greatly vary from project to project. For example, the material cost is affected by the size of the project and the type of material used. Similarly, labor cost is affected by the time taken to complete the project and the number of workers.

Let's dive into how one can estimate a construction job.

Estimate a Construction Job With Accuracy 

1) Review Project Specs

The first step is to understand the project. What are the goals and objectives? What does the client want? It's helpful to know about the client's personal preferences before creating a budget. So hold meetings and stay in touch. 

To analyze the project scope, one can go through blueprints and other construction-related documents. Other than that, site visits help to bring clarity to the project. If you have time, it is better to take a few hours out to visit the site instead of relying on just blueprints.

2) Quantify Materials

The quantification of material, also known as material takeoff, forms the basis for material cost estimation. Construction Estimating Services use advanced takeoff software that increases the efficiency and accuracy of an estimate. Software allows an individual to take measurements right off the blueprints. Not to mention that they are accurate as they are free from human error.

If you want to rely on manual methods for takeoff, then make sure that the measurements are accurate. Moreover, account for 5-10% for wastage of material so there is no shortage of material. 

3) Calculate Direct Costs

Direct expenses as costs that are directly associated with the construction project. Let's take a look at them.

• Material Cost

To calculate material costs, you need to know about the type of material, the quantity of material, and recent market prices. Bidding Estimate, a renowned construction cost estimating firm, provides zip code-based pricing by using a pricing guide called RS Means. If you don't have access to a pricing guide, you can visit the marketplace yourself and get multiple quotes from suppliers. Make sure that you get at least 3 quotes. 

• Labor Cost

Labor can either be charged by a flat rate or an hourly rate. In the case of the hourly rate, you need to multiply the labor cost by the time taken to complete the project to estimate a construction job. Other considerations of labor cost include insurance, overtime pay, benefits, etc.

Larger-scale and complex construction projects often require a larger labor budget than small-scale projects.

• Equipment Cost

Equipment cost needs to include all the purchased and rental cost of equipment. In most cases, you'll have to add maintenance costs as well in case any machinery breaks down. 

4) Calculate Indirect Cost

Indirect costs refer to the expenses that are not directly linked to the building's structure but still impact the cost. Some examples of indirect costs include

• Utility Bills

• Administrative Cost

• Transportation

• Permits and Inspections

• Marketing Cost

• Office Supplies

Not all of these costs will be present in each project. For example, marketing cost is only included if the client has requested it.

5) Profit Margin and Contingency

The last step to estimate a construction is to add your own profit margin in the project. Usually, contractors charge 5-10% of the total cost of the project.

It's also vital to create a contingency plan in case of any unexpected situation or unforeseen condition. For example, weather conditions can increase the cost of the project, resulting in cost overruns. So, to save the project from being over budget, it's very important to add a contingency plan. Professionals usually allot 10-15% of the total project cost as contingency.

Closing Remarks

By now, you may have an idea of how to estimate a construction job efficiently. The key to creating an accurate estimate is to make sure that you don't rush things. Most contractors will skim through the calculations and assessments as they have limited time. But it's very important to perform each step in detail to get an accurate cost estimate. To tackle the problem of time management, one can outsource estimation to professional and reliable cost estimators. This will allow the contractor to bid on multiple projects at once. Not to mention, they will get an accurate budget in a short period.