🏔️ Peak Performance 2024 is here. Get the report
🏔️ Peak Performance 2024 is here. Get the report

How to Estimate Construction Costs

When it comes to spending money on a job, as a contractor, you want to be as precise as you possibly can. But in order to start making money on your construction projects, you need to stop guessing your construction costs and come up with a detailed process that will help you get as accurate of estimates as you can. Here are a few starting tips that will help you with this process.

Consider the individual costs of the project

Before starting your project, you need to look at a few components. How long will the project take? How many workers will need to work on it? How much are you paying each worker? What materials do you need and what overhead costs do you have? It’s best to use a master checklist to list out all the necessary items you need for a job and attach them to a unit cost. This can include your material, labor, and overhead costs. Add up all these costs together to get an accurate estimate.

Use project management software

If you are an experienced contractor, you can turn to previous jobs in your construction project management software and compare them to the job you are about to start. Look at the costs associated with previous jobs and see what areas you could have saved or invested more in for the job. It’s best to keep these documented in your CRM/PM software so you can keep all this information in one place and look it up easily.

You have to be extremely detailed in your cost estimating process so you can get the most accurate estimate. Keeping these costs documented in your software will help make your process go seamlessly. CRM/PM software will also be useful for noting the failures of a project. This is important to do so you can stop losing jobs and reflect on mistakes you made in the past to make adjustments for future jobs. Doing so will help you avoid the same mistakes and save on unforeseen costs.

Consider what could go wrong with the project

It’s best to be prepared for the worse so you can prepare an accurate estimate. It’s difficult to assume what might go wrong in a project, but if you can identify the risks associated with it, you can factor them into your project’s cost and timeline. One common challenge contractors will see when they take on a project is limited material availability or scheduling delays. Materials are usually the highest percentage of the overall project cost and can push a project’s timeline further if not ordered on time. Although you can’t control these mishaps, you can and should involve your supplier very early on in your project to avoid these problems. Beacon is a useful tool to use to keep ahead of the busy season. You can get live pricing on materials and send orders immediately to Beacon to get faster processing.

Construction costs are most accurate when you have a solid estimating strategy down. Again, you should consider the individual costs of a project, use a project management software, and look at what could go wrong with your project. Preparing yourself with a master checklist, notes from previous projects, and project mishaps will help you stay on track with your project and make your construction costs worthwhile.

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