According to one study, about 30% of construction companies fail.
If you don’t want to end up in that percentage, one of the things ensure you do is provide accurate construction estimates.
But how do you make sure you have a good construction estimator? And what should they do? Keep reading to find out!
1. Come Up With a Master Checklist
In order to make accurate construction estimates, it can help to have a master checklist to help you stay on track. This will let you know which factors you’ve considered and which ones you still need to incorporate.
You should write down all of the items and steps needed in the program. This will also help you stay organized as well.
While pen and paper work fine, you can also use all kinds of software programs that will make it easier for you.
2. Be Detailed
When you are making your checklist or writing out your bid, make sure that you include a lot of details. Do as much research as you can before you bid because that will help you ensure you get as close as possible.
You’ll need to consider all the different factors of the project and then think about how long each phase will take. What materials will you need? Be specific to the type of brand as well!
You’ll also have to consider which subcontractor you’ll use and then how much they charge per hour. The more specific you can be, the more accurate your proposal will be.
3. Use the Unit Costing Estimating Method
One way that you can come up with your hours is to use the unit costing estimating method. If you’re not familiar with that method, you can also contact CostCertified to ask them for help as well.
The unit costing method is a lot faster and can be just as accurate too. To do it, you’ll need to make a list of all of your line items. For a specific job. Then you’ll have to attach a unit cost to each line item.
4. Expect Changes in Prices
Another way to make sure your bid is as accurate as possible is to anticipate higher prices as well. Materials, for example, can fluctuate, and you might have to pay more for materials than you originally put in your bid.
To avoid that, you might want to add in a little bit of buffer room somewhere into your bid.
Contractors could also change their prices depending on the material costs or just to meet rising inflation prices. To figure out which materials or line items might be susceptible to rising prices, you can ask yourself a few questions.
For example, is there always a high demand for certain materials or labor? Are you having any custom work done? Will you have supply chain issues?
Will it be affected by the season? Do you need a faster turnaround time than usual?
If you answer yes to any of those questions, you should do your research to see what the average price is of the material through a given time and bid accordingly.
5. Come Up With an Hourly Rate
If you’re going to be working with contractors or craftsmen, you’ll need to include their hourly rate. Not only will you have to include that, but you’ll also have to factor in their benefits, and federal and state payroll taxes.
After you’ve factored all that in, you can have a more accurate hourly rate and figure out how many of those employees you’ll need for your job.
6. Ask for Help
You might also want to consider asking for help if you are bidding in an area that you don’t know a lot about.
For example, if you have to do a detailed breakdown on plumbing but you’ve never worked that before, contact a plumber and ask them for help on construction quotes.
In fact, some subcontractors have consultants who are tasked with working on construction companies who aren’t sure how to bid on something.
7. Define Your Risks
If something goes wrong, you’ll either run out of hours or money to run your project, or you’ll have to stop the operation or work even longer hours.
When you start estimating your hours, try and think of every problem that could come up during the project. This way you can help budget that in so you won’t have to scramble when something goes wrong.
8. Figure Out Equipment
Lastly, make sure you consider what equipment you’ll need to complete the job too. For example, if you don’t have a specific type of equipment, you’ll have to figure out how to rent it or factor in the cost of buying it.
You’ll also have to check your schedule to ensure that you’ll have your available equipment during the time of the project. Otherwise, you’ll have to factor that cost into renting another machine.
Discover More Tips to Become a Better Construction Estimator
These are only a few tips to become a better construction estimator, but there are many more things to keep in mind.
We know that running any kind of business can be stressful, but we’re here to help you out.
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