What is Construction Cost Estimating & How To Calculate It?

What is construction cost estimating? How can you estimate the cost of construction? There are several types of construction cost estimates. There are also tools you can use to help estimate construction costs. 

So, how do you create the best construction cost estimates during takeoff? First, you must learn the steps of being a construction cost estimator. Projects with high amounts of dollars, resources, and jobs require accurate cost estimates. The most important thing is to win the bid. 

What is Construction Cost Estimating? 

Estimating the cost of a construction project affects the money you will make. There are no shortcuts to making a profit. Mistakes can be costly, even after the job is done. 

Many decisions must be made when you estimate construction costs. Correct estimates keep your work on time and budget. It is worth the resources to ensure the highest profit.  

As a construction cost estimator, you must become familiar with the basics. Use estimation software to do the heavy lifting. This combo makes it quicker to submit bids, adjust to change, and turn a profit. 

Types of Cost Estimates 

There are several types of construction cost estimates: 

• Preliminary – The idea of the cost based on limited information. 
  
  
• Plinth Area – The external dimensions of the structure, including the foundation type, roof construction, materials, and finishes. 
  
  
• Cube Rate – The total building volume. 

• Elemental – The total cost down to the structural frames and floor finishes. 
  
  
• Detailed Estimate – The most detail possible with an itemized list of costs divided by trade. Includes labor, materials, and equipment. 

How Do You Calculate Construction Costs? 

Once you have the big-picture overview, gather every detail. Make calculations by collecting information like: 

• Direct Costs – Cost of materials, labor, and equipment 
  
  
• Indirect Costs – Cost of utilities, legal fees, permits, etc. 
  
  
• Labor Costs – Cost of paying your team including wages, taxes, and overtime
   
• Subcontractor Costs – Cost of contracted work including labor, materials, and equipment 

Common Cost Estimation Problems 

Common issues while estimating building costs include: 

• Not Reviewing Your Work – Take your time and double-check your work.  
  
  
• Material & Supply Costs – Keep up to date on ever-changing costs. 
  
  
• Labor Costs – Do not underestimate the cost of labor. Estimate labor costs based on projected hours. 

Learn more about common construction estimating mistakes here. 

Why Use Cost Estimating Software? 

Manual takeoffs are time-consuming and have a higher risk for error. Cost estimating construction software lets you work smarter, not harder. Takeoff solutions by ConstructConnect arrange itemized costs, labor rates, change orders, and materials to predict a job’s cost.  

This software makes estimating the cost of a construction project easier to find and read. It gives you access to a network to submit more bids and win more projects. You can also customize and save your work. 

Conclusion 

Cost estimating your construction project has many moving parts. They must all be cross-checked for accuracy. Do not let the heavy lift keep you from your goal. Remember to think through each project stage and calculate the obvious and the not-so-obvious.  

Remove unwanted surprises by avoiding common mistakes. Stay organized and save time by using software like Quick Bid. You’re one accurate cost estimate away from another successful bid. 

Make your time count! Improve your takeoff and estimating process with ConstructConnect bidding tools. Explore Our Takeoff Software Offerings and Schedule Your Free Demo!