Developing a construction estimate is one of the most crucial—and difficult—aspects of a project because it directly impacts the profit margins. This is also why it’s imperative for the estimate to be precise and accurate. The entire project budget can be affected if the estimates are off by a considerable amount, leading to costly delays and project losses.
Professional estimators keep track of the actual labor costs, equipment and material costs, subcontractor expenditures, and other budgetary matters while also taking into account the realities of the site, including the soil conditions, environmental protection, weather, site layout, etc.
With an accurate construction estimate at-hand, contractors can determine exactly how long the project in question will likely take and how much it will cost them.
Let’s look at some other components that go into creating a comprehensive and precise construction estimate:
1. Quantity Takeoff
Quantity takeoff is the process of converting information from structural engineering drawings, architectural drawings, plumbing drawings, and electrical drawings into a list of items whose quantities can be measured.
A construction estimator determines the actual costs, measurement of material, and labor needed to complete a project. Quantity takeoff is a crucial part of the process since it helps the contractor determine if the project is profitable.
2. Labor Hours and Rates
Professional estimators use their experience to estimate the labor hours required and the rates at which they’ll be paid.
Additionally, the labor productivity at each stage is also taken into consideration, along with the possibility of overtime work and the cost associated with those hours.
3. Direct and Indirect Costs
Expenditures of the project are classified into direct and indirect costs.
Direct costs are the labor, material, and equipment costs that directly account for a specific activity in the project.
Indirect costs or overhead costs, on the other hand, are expenses of items that aren’t directly allocated with construction activities. These overhead expenditures include security costs, administrative costs, quality control, legal fees and permits, and costs of temporary structures.
Outsource Construction Estimation Today!
Cost estimation not only helps contractors determine the profitability and feasibility of a construction project, but it also ensures that all the involved parties deliver the project within budget and on time.
At Remote Estimation, our quantity surveyors and estimators take into account the market trends and current construction standards to provide accurate bids that allow construction projects to move forward successfully.