Estimating the cost of a construction project is essential to getting projects completed on time and within budget. A cost estimation is an approximation of the probable cost of the entire project. To get it done right, you have to figure out the amount of work and time it needs to complete tasks, consider the available resources, list down all costs, and prepare a schedule.
There is no definitive guide to cost estimation. An accurate estimation of costs depends on the use of good tools, efficient business processes, and your own personal judgment. There are, however, best practices you can follow.
1. Choose a high-quality estimating software.
More than half of all cost estimations are inaccurate and unreliable because of low-quality tools. Even if you are starting out, it’s important to use a good software with basic features, including a material takeoff tool for listing items and integrated cost databases that use readily available data.
2. Be flexible.
Many things can go wrong during a construction project, but you can always plan for them. Consider the time of the year the construction is being done and account for bad weather. There’s also the possibility of funding sources running out, so you must have a plan on how to save in case finances are depleted.
3. Break big tasks into small chunks.
Take big tasks and break them down into smaller, more manageable chunks. This allows you to work meticulously on each small task so you don’t have to miss the smaller, finer, but still important details.
4. Be able to justify your decisions.
When higher management, contractors, or clients ask you to explain why you allocated a certain amount of time or money for a certain aspect of the project, you should be ready with a definite answer. This does not just build credibility as a cost estimator, it also builds trust with the client.
Lastly, don’t discount the human side of cost estimating. Good cost estimation is done with a combination of efficient, accurate software and competent, conscientious humans. There are many things a person can do that a computer cannot. A complementary partnership between machine and human is essential to accurate cost estimates.