Ultimate Construction Estimating Guide for New Contractors

The construction industry is booming, and it’s estimated to grow leaps and bounds over the next five years. But with this growth comes competition. If you’re a new contractor, estimating is probably one of the most overwhelming parts of the job. This construction estimating guide can help.

The task seems intimidating at first, and you might not know where to start. But don’t worry, we’ve got you covered. Bridgit offers the best construction software programs at the most affordable price.

You must be thinking, how much will your project cost? What do I charge my customers? How do I estimate? These are just some of the queries that plague new contractors.

The first thing you need to know is that there are two different types of estimating: a fixed bid and a cost-plus estimate. These each have different ways of pricing materials, labor, and profit margins. Fixed bids are easier for the client, but cost-plus estimates allow contractors to provide more creative ideas for the project.

With this construction labor estimating guide, you’ll learn how to form an accurate estimate for any size job and become a reliable contractor who takes care of their customers.

Construction Estimating Guide to Software

Construction estimating software allows contractors to calculate various things such as labor, cost, and material. A decent estimate takes into account all of the costs connected with a project.

Many aspects will be included in an estimate that is not indicated on the plans and specifications but is necessary to complete the project.

Temporary shoring, project accounting, equipment rental, and insurance are just a few of the services available. The list might go on forever. You must account for every penny because if the owner does not pay, you will.

What Is the Purpose of Construction Estimates?

Depending on the client that employs a contractor to handle a project, building estimates are used in various ways.

A property owner will analyze the cost estimate to calculate the expenses of long-term maintenance and upkeep of the structure after it is created, in addition to the expenditures of the actual building project.

They’ll also look at numerous constructions estimates from several contractors before deciding on the best price and putting together the entire budget.

In addition, the owner frequently requests that the estimate accounts for unforeseen costs to avoid scope creep during construction. Architects and engineers often look at cost projections to see if the project is feasible.

How to Select the Most Appropriate Work for Bidding?

Selecting the correct type of work to bid on is the first stage in the construction estimate process. Building papers, departures, and other direct costs are used in the bid estimating phases to enable the estimator to determine approximations of employment costs.

Customers and builders are concerned about project costs due to the financial risk of cost overruns and project failure. Both parties benefit from spending time researching and assessing costs.

Examining Construction Plans

You should evaluate both the architecture and your division’s designs to understand and recognize the overlap between all the other industries, operating altitudes, and heights that will affect construction expenses such as labor, material prices, and equipment costs.

You should consider a birds-eye view of the project once you have a broad idea of the general construction.

Now is the time to go over your division’s designs, noting any technical features depicted and keeping an eye out for any differences between the drawings and the actual product.

Cost Estimation

Estimating construction costs is primarily about three things:

Funds

You figure out your costs, apply your markup, and give your consumer the total. Costs can include both direct and indirect costs. You can also include an escalation clause if it is a long-term project.

Consistency

Your firm will only thrive if your estimate is correct, allowing you to generate a profit while avoiding unpleasant surprises for your consumers between a pre-construction estimate and the final amount due.

Clients

They want quick responses to their estimates. Customers may accept the first quote they get for private construction projects such as house renovations and additions.

Constructing a Construction Proposal

We recommend utilizing terminology that is similar to that found in the construction specifications and drawings.

This makes it easier for the independent contractor or construction management to look through your bid price and make sure you’ve covered everything and that nothing major is missing from the scope of work included in your bid price.

In many circumstances, it’s beneficial to base your estimating process on the CSI form, which allows you to quickly compare one element of your bid price to a section of the requirements and make adjustments.

Are programs or people better at estimating construction costs?

When it comes to estimating building costs, the lists above show that humans and software solutions are highly compatible.

Computers, on the other hand, acquire levels of speed and accuracy in resource computations that far exceed those of humans. So it is better to opt for the software rather than human help.

How Can the Construction Estimation Process Be Made Easier?

Estimating construction costs is a meticulous process. To provide an accurate estimate, you’ll need an estimator who knows about their field, proposed building requirements, and market trends.

Construction estimating services can benefit companies without an estimator on staff or companies that can’t justify the costs of using estimation tools. These services cut down on estimation time and effort while delivering accurate bids that help building projects move forward.

Endnote

Here are a few takeaways from our estimating guide for construction:

You are correct in believing that construction estimating takes a lot of time, and if you don’t have a system in place, it will take much more time.

Construction estimating software can simplify the quantity and estimating process by allowing you to apply prebuilt parts and assemblies without having to re-enter the same information.

Furthermore, the extra value created by this combination can make a good impression on the client and justifies compensation for the estimating job alone.