Estimation is no joke. In fact, it is one of the most important and tough tasks when it comes to construction. It either breaks or makes your project. Bad estimates can cause loss of money and unprofitable projects. Making bad estimates constantly and losing money can put you out of business and shut your doors for good.
On the other hand, good and accurate estimates lead to success and profits. This is why getting a good estimator is very important. To make accurate estimates, there are many factors that you need to keep in mind, such as labor and materials cost, takeoff measurements, overheads, and employees’ needs. Making mistakes during estimation can lead to a bad bid that will cause a loss of profit.
Here are the six most common construction estimating mistakes you need to avoid.
1) Confusing and vague design and plan
If your plan and specifications are unclear and confusing, it will cost overruns for sure. This usually occurs when proper planning is not done due to lack of time or rushing through the design phase to get the project started early. It also might be because of the lack of experience of the design team. If your plan and goal aren’t clear, it is very difficult to make accurate estimates.
2) Confusing material takeoffs
To make accurate estimates, you need a detailed and comprehensive list of all the materials, tools, equipment, and quantities required for the project. A vague or incomplete material construction takeoff list is doomed to wrong estimates. You must know all the materials required and their quantities. The blueprints are used to create the materials takeoff list.
3) Materials and equipment cost
The materials, tools, supplies, and requirements required for the project are a major cost faced by business owners, and they are very difficult to estimate. The cost of materials varies significantly from time to time. They may fluctuate greatly between the time you do the estimate to the time the project officially starts. You can get a little help from your friends in the building product manufacturing and supplying industry. They can tell you the accurate prices and recommend better materials that will benefit your project.
4) Labor costs
Labor cost is the major expense of the project and the most difficult to estimate. Different factors must be kept in mind when estimating labor costs, such as the number of workers, their experience and expertise, pay rate, and productivity and activity levels. There are some construction estimating software that can help you make accurate estimates and manage employees, allow you to monitor them, and keep track of their progress.
5) Do not make uneducated guesses
Uneducated and uninformed guesses can ruin your estimates. Using information from your previous projects allows you to make accurate estimates. Estimates of labor costs, material and equipment costs should be based on the most relevant and present data available in the market.
6) Ignoring risks
When planning a project, one must keep in mind the potential risks, and they should be a part of your estimates. Also, you should know how to tackle the risks and how they may impact your project’s progress and costs.
Estimation is the fundamental foundation on which the entire project stands. If the base isn’t strong, the building will eventually collapse. Estimation should be given proper time and attention because the success of the project depends on it.