Estimators help contractors prepare competitive project bids. They analyze the project requirements and create a detailed breakdown of costs, including profit margins and potential risks.
Contractors also need to include indirect field costs and overhead in their estimates. For example, they may have to pay for equipment that is leased or rented. In addition, they may need to prorate field supervision and add bonding and insurance costs to each project estimate.
Saving money on estimating services increases profit margins and frees up cash for investing in other areas of your business. For example, reducing overhead can help you afford the new boom lift or power tools you need for on-site project work. It can also free up cash to invest in a marketing campaign that will attract new clients and improve your reputation as an experienced, reliable builder.
The first step of construction estimating is to determine the total cost of the project. This requires a thorough review of the Scope of Work and building plans and specifications. Once the estimator has validated these documents, they can start compiling a list of materials that is needed to complete the job, called a quantity takeoff. This can be done manually or digitally using construction estimating software, although most estimators prefer to use software to speed up the process.
Once the estimator has compiled a list of materials and equipment, they can begin working with suppliers to get pricing information that they will incorporate into their bid. This can be a labor intensive process. It is also important to consider the impact of changing market trends on costs and availability of materials, labor and equipment.
The final step of construction estimating is to submit the estimate to the client. This may be in the form of a detailed price breakdown by cost code, phase or division, as well as a grand total. The bid must include any additional terms and conditions the client requires.
By outsourcing construction estimating services, builders can focus on other aspects of their business. This saves the builder money and time. They do not have to worry about software updates, figuring out new tools or simplifying the pricing structure to suit their clients. Instead, they can let the specialized estimating and quantity takeoff service providers handle all of these details.
The cost estimation process begins with a review of the project documents, which include blueprints, plans and specifications. This includes a list of all materials, equipment and labor needed for the project. This allows estimators to calculate the total cost of the building, including indirect and overhead costs.
Once the estimator has a complete picture of the project, they can begin to create estimates for individual work packages. This helps contractors avoid over-buying or under-buying materials, which can save both the client and the contractor hundreds or thousands of dollars in the long run.
Specialized estimating and quantity takeoff service providers are constantly pursuing the latest software and technology to streamline their processes. They also have a team of experienced and knowledgeable employees that are always training and improving their skills. They are familiar with a wide range of construction methods and can use a variety of software to create detailed and accurate estimates. They can also help you stay up to date with material prices and price fluctuations. This is particularly important when calculating the price of concrete, steel and aluminum, which can ebb and flow due to current market conditions.
A good construction estimate is the best way to prevent costly errors during the building process. Using estimating software reduces the time it takes to prepare an estimate, and improves its accuracy by providing detailed cost data in various formats. These include item-by-item lists (e.g. 2×4 #2 studs, 4000 psi concrete mix), category-based reports, and high-level groupings. It also includes comparison reports that make it easier to compare multiple estimate versions side by side.
Creating an accurate construction estimate is a complicated task that requires knowledge of a wide range of subjects. It’s also a constantly changing job, as prices and availability of materials, equipment, and labor are always shifting. This can create serious problems down the road, particularly when shortages or supply chain issues drive costs past normal rates.
One of the biggest challenges for construction estimators is maintaining a client’s expectations. They may want gold-star luxury on a bronze-age budget, and it’s up to the estimator to balance these conflicting objectives.
Fortunately, software programs like Clear Estimates have made it possible for estimators to put down the slide ruler and calculator and work faster and more accurately. These programs are loaded with standard features, including a regularly updated database of material pricing and pre-built assemblies. They also seamlessly integrate with other software tools, such as Buildertrend and QuickBooks, making them easy to use for the entire project management cycle.
Many estimating services for builders work with a variety of software programs. Some have extensive, regularly-updated databases and standard templates that contractors can use to create estimates for projects of any size. Others offer features such as built-in takeoff software, project management tools, and construction accounting functionality.
For example, buildxact’s estimating software can help users create accurate estimates five times faster than with a traditional spreadsheet. It also offers a wide range of tools and options, including a flexible layout and an intuitive user interface. In addition, the program includes a built-in takeoff feature and allows you to import price lists. It also features an advanced material database that allows you to choose materials based on their local availability.
Construction estimating is a challenging process because it involves predicting future costs. Estimators must take into account changes in prices for materials, equipment, and labor. This can lead to a significant variance between estimated and actual project costs.
To mitigate these risks, a construction estimator should make sure that they understand all the work requirements and specifications. They should also identify any nonstandard items that will affect the cost of the project. For example, a nonstandard floor plan or unique finish may add costs to the job. Construction estimators also need to include the cost of insurance and bonds, which are required for completing a construction project.