The estimate is considered one of the most difficult and important stages in construction. To make a profit, it is necessary to accurately assess the processes concerning any building processes. Based on the latest research, 1/3 of construction companies earn much less than expected through construction estimations.
To get accurate forecasts in the context of each project, it is necessary to accurately calculate all material and labor costs, and pre-calculate all risks and costs. One of the best ways to do this is to count on construction costing software. Digital tools (but only high-quality ones that you can trust) will allow contractors to make calculations, predictions, and reports automatically.
What Are the Top 5 Mistakes Construction Estimators Do?
Remember that a few mistakes made by the construction estimator are a risk to lose profit in the future. What are the most common estimation mistakes and how to prevent them? Let’s take a closer look at the top 5 challenges of today’s construction estimators and solutions to cope with them.
1 – Not Visiting a Construction Site
Visiting the site and observing all the on-site processes makes it possible to measure the necessary parameters, study topography, evaluate the soil using samples, etc. Many opportunities open up with a visit to the building object physically and while contacting the staff personally.
Estimators can keep in touch with the on-site workers through online communication channels and get insights directly from the task performers. It is worth noting that visiting the site is recommended for many specialists in different departments (sales managers, accounting specialists, etc.). Their opinion is important for assessing additional costs and new proposals in the organization of construction.
2 – Inaccurate Takeoffs
Thanks to accurate estimates, you can calculate how much construction materials, labor, and special equipment will be needed. If an error takes place in the calculation, there are several possible variants of your further situation:
- The project will be overestimated and will not be able to win the tender.
- The project will be underestimated, and it will lead to a loss of profit from the project.
Thanks to the modern present-day software, takeoff can accurately measure all parameters for evaluation. This helps to save time. Use digital tools for your construction estimating to reduce the possibility of errors to the minimum (even to zero) level.
3 – Labor and Material Costs
One of the difficult aspects of evaluating a project is the calculation of labor and building materials costs. Responsible and productive workers can earn higher salaries. It is necessary to accurately calculate how many workers are required to perform a certain type of work, and how many hours it will take to complete the tasks.
This also applies to building materials, the demand for which is quite high, and the tariffs are very uncertain. Establish working relationships with suppliers and manufacturers to set fixed prices to calculate how much will be needed to build the project.
4 – Failure to Assess Risks and Create Contingencies
Any construction has its risks. If you do not assess all the risks, the project may turn out to be a failure, and you will lose all investments. To avoid this, you need to understand that the higher the risk, the more time you need to devote to problem-solving and risk reduction to reduce additional costs.
5 – Non-Verification of Subcontractor Estimates
When working with subcontractors, the general contractor should familiarize himself with their bid estimates and proposals. Subcontractors must be bidders and have completed projects to make your project profitable.
Accurate take-offs are the basis of accurate estimates. Pay attention to the most common estimating errors that are presented in the article. Note that the most efficient methods for doing away with these challenges are a well-thought management strategy and automation of the routine tasks (reporting, estimates, bidding, etc.).
Your risk managers and estimators will perform more accurate results in the context of the project planning with high-grade software and other digital tools. The most result-oriented contractors consider this solution one of the best for a successful construction business in 2022.