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Construction estimating is one of the most challenging, yet important jobs in our industry. Profits are won or lost based on how accurate your construction estimates are and how closely they match your final project costs. Chances are one wrong estimate on a construction project that loses money won’t put you out of business, but a couple of unprofitable projects may have you closing the doors for good. Here’s a look at some of the most common construction estimating mistakes and how to prevent them.
Not Conducting a Site Visit
Often, site visits are mandatory to submit a bid, and with good reason. Subcontractors whose work may be impacted by the site conditions should visit too. This allows everyone to assess the site and factor in any additional costs existing site conditions might present in estimates and bids.
Inaccurate Takeoffs
Takeoff software is a great option to ensure that you get accurate measurements for your estimates. These online construction estimating tools are only as good as the user, so estimators must get the proper training and be comfortable using the software.
Addenda
Be sure to check for addenda before submitting your bid. These may include changes to design or even changes to the bid date. If an addendum comes out after submitting your bid, review the information, make changes, and re-submit.
Labor Costs
Most project budgets are, on average, 60 percent labor. Focus on how many hours someone takes to perform a task to use as a guide when estimating labor costs. Don’t forget to factor in whether prevailing wages are required, which may or may not differ from what you typically pay each worker.
Materials & Supplies Costs
Costs for building materials and supplies rank high in being hard to accurately estimate. Establishing relationships with building product manufacturers and suppliers can help lock in accurate pricing. They can also steer you to alternative materials that might better fit your project.
Failing to Assess Risks & Creating Contingencies
Every construction project comes with risks. Completing a risk assessment should be part of your estimating process. For one, it helps in your bid/no-bid decision-making. It also helps to determine how much to estimate for contingencies. Failure to assess risks and build contingencies into your construction estimating process will be detrimental to your project. Make sure to factor in overhead and soft costs, too, such as permitting and inspections which can often be forgotten or neglected.
Ask Questions
Everyone makes mistakes now and then. Take the time to carefully review drawings, specifications, and other addenda. Double-check your measurements and those of your subcontractors.
Accurate estimates start with accurate takeoffs. ConstructConnect helps you find the right projects and complete fast and accurate takeoffs for any construction business.
Take the bidding process one step at a time and stay competitive as you learn tips to win more profitable construction projects.
