A construction estimate is used to forecast how much it will cost to build the structure in your project plan. It is the tool that will serve you to have a picture of the number of resources you need to complete your project. Getting the accurate cost estimate for your project could be a challenge as it will determine whether your bid will be acceptable or not. An underestimate will get the tender awarded to you but it may cost you more in the process of construction while an overestimate will get the tender awarded to another contractor. For easier reference, we have gathered the best construction cost estimation tips for you.
Don’t Underestimate Labor Costs
Labor costs are among the top costly expenses. To develop an accurate estimation cost, you have to think of your crew as more than just numbers and statistics. While the cost per hour might be set, there is more to labor costs than hourly rates. You need to determine how much work an experienced team member can do compared to someone new to the job needs to be factored in as well.
Get Expert Advice
In order to deliver a good cost estimation plan, we recommend that you talk to someone with a higher authority regarding the same issue. There are probably aspects of the build that you’re an expert on and can very accurately estimate costs for, but other parts of the construction might be beyond your capacity.
Use the Unit Cost Method
Getting the unit cost of each individual material needed for the project is probably the best tool you need to avoid under estimations or overestimation. This method will also serve to accurately determine the cost of the material at the prevailing market prices to avoid losses.
Additional Costs During the Project
When undertaking a project, some unforeseen expenses may be brought to light. For instance, you may encounter equipment depreciation or other emergency costs which may need to be addressed immediately for the project to continue. While this may be hard to do, we recommend that you set aside a reasonable amount aside to cover any emergency costs.
Be aware of Material and Product Price Fluctuations
We recommend that you get a deep understanding of the prevailing market prices and the flexibility of these prices with time in order to avoid future frustrations.
Conclusion
In conclusion, a project cost estimation will play a key role in determining if you will win the tender or not. We recommend considering the above tips in order to develop a good plan.
References: DataBid, ProjectManager
