What Is a Construction Estimate (With Definition and Guide)

By Indeed Editorial Team

Published June 10, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Construction estimates are computations used to evaluate the potential cost of a building project. These calculations give information to assist building planners in selecting the right project. Learning about these estimates can help you if you're interested in providing good and fair prices to your clients. In this article, we define a construction estimate, explain its importance, discuss how to become an estimator, highlight their essential skills, and review the various mistakes to avoid in this profession.

What is a construction estimate?

A construction estimate is when builders or construction planners forecast the cost of a project. This assessment establishes the feasibility of a project, its possible budget, and the maximum amount you may charge clients. To develop an estimate, you may compare your project to other builds and consult with experts to ascertain material and labour costs and the expected duration of the project.

Why is this estimate important?

These estimates help determine the cost of a project and the profit potential. Additionally, you may utilize these estimates throughout the building process to verify that you remain within budget and have all the necessary items. To help you better understand, here are some other reasons estimates are critical:

Forecasting profit margin

Using this estimate, you can forecast your profit margins more accurately. To earn a profit, it's important to charge more than the project's cost. An ideal estimate can include all costs, including lost supplies and material disasters, to guarantee that your project is profitable.

Related: How to Become a Construction Manager in 7 Steps

Offering correct quotes

This estimate also enables you to deliver more precise bids or an estimate of the cost you can charge for a project to consumers. Customers need realistic bid ranges so they know approximately how much money they might spend on the projects. By conducting a detailed estimate, you may reduce the range of your bid and attract more consumers.

Budget management

Your estimate may assist you in developing and maintaining a project's budget. The estimate serves as the foundation for your budget, which might certainly contain prices for other parts of construction, such as supplies and permits. With an exact estimate, you can track your spending and keep track of where your money is going.

Calculating the project's size

Occasionally, an estimate might assist you in comprehending the scale and complexity of a job. As you investigate various aspects of a project, you may discover that the materials are too expensive. You may also find out that the scope of the work is excessively large, or the schedule is too short for the number of personnel you can hire.

How to become an estimator

Here are some steps you can take to become a construction estimator:

1. Earn a degree

A bachelor's degree in mathematics, civil engineering, construction science, or a closely related discipline is often necessary for estimators. Conduct a search for available estimating employment in your region and ascertain the general degree of education necessary for the job. If you're still in high school, concentrate on math subjects since this position demands great mathematical skills.

Related: 13 Jobs Within Construction to Consider

2. Gain experience

Internships are an excellent opportunity for students to obtain professional experience in this capacity. This is because they undertake their tasks directly under the supervision of an estimator. Because this employment normally needs some amount of experience, an internship, or entry-level position might be essential.

3. Acquire certification

While many professional certificates need at least four or five years of experience, there are several excellent entry-level estimating certification alternatives. Pursue one of the more advanced certifications if you have the relevant expertise. They might certify your expertise and skills and place you in a position to grow more quickly in your profession.

5. Maintain an updated resume

Update your resume whenever you've obtained the necessary education, experience, and certifications. Include your greatest level of education and related job experience in your resume. Emphasize the transferrable skills you've gained in other roles that apply to the estimator position. Look for specific keywords in job descriptions that you may use throughout your resume to catch the hiring manager's attention as they scan the document.

6. Apply for jobs

Search for available estimating opportunities in your region and select the roles for which you are the best qualified based on your experience and education. Apply with an updated resume and a well-written cover letter. After getting employment, your employer may require you to complete on-the-job training under the supervision of an experienced estimator in order to gain a greater understanding of the profession.

Essential skills for construction estimators

Here are some essential skills for construction estimators:

  • Technical skills: These include the numeracy and computing abilities necessary to perform the duties of this profession. Estimators are to have good mathematical abilities to compute labour, equipment, and material costs to estimate the entire cost of a construction project.

  • Analytical skills: It's important for estimators to evaluate and compare various manufacturing or building procedures to determine the most cost-effective alternative.

  • Communication skills: These abilities include writing and verbal communication, active listening, and the capacity to notice nonverbal clues. It's beneficial for estimators to be able to explain the costs associated with a project to management and contractors.

  • Attention to detail: Slight revisions to estimates may have a substantial influence on the ultimate cost of a project, particularly for the cost of bulk supplies or hourly labour. It's beneficial for estimators to have high attention to detail to avoid mistakes.

Mistakes to avoid as a construction estimator

Estimating is a precise job, and your success or failure there might follow you throughout the project's life, all the way to your payment requests and closeout. The following are some frequent places where pitfalls arise. If you can avoid these errors, your estimate is more accurate and your work might be simpler.

Not visiting the site

Many bidding opportunities provide the opportunity for interested bidders to attend a pre-bid meeting and see the worksite. These are often necessary to submit a bid and for good cause. Each worksite is unique, and unknown site characteristics may cause unanticipated, and expensive, complications once construction begins. When performing a site inspection, you want to collect measurements, evaluate the topography, and also take some soil boring samples. Additionally, you may consider the road access and traffic to the site, the amount of space available for staging, equipment and material delivery and storage, and the environmental safeguards required during construction.

Inaccurate takeoffs

Your takeoffs serve as a reference point for your estimates. If they're absent or incorrect, they might have a major impact on your predictions. Accurate takeoffs enable you to calculate the exact number of materials and supplies required. They are required to determine your labour and equipment needs. If you neglect components during takeoff or do not collect accurate measurements, you risk either overestimating the project and losing the bid, or underestimating it and risk securing an unprofitable agreement.

Takeoff software is a good technique to ensure the accuracy of your calculations. Additionally, it saves considerable time as compared to manually doing takeoffs. Because these technologies are only as good as their users, it's vital that estimators receive adequate training and feel confident using them.

Carrying costs

Contractors often pay for supplies, subcontractors, and labour costs in advance and hold those expenditures for a lengthy period before receiving payment for their work. It's often more costly if you're having problems collecting payment from the general contractor or the owner and resorting to legal action. While there are already professionals in the business who can aid with payment expediting, these procedures may take time.

Related: Understanding Industrial vs. Commercial Construction

Overlooking costs that are less apparent

Frequently, soft expenditures such as permits and inspection fees get omitted from estimates, although they might total thousands of dollars. Additionally, there are less-obvious expenditures, such as temporary power, dumpsters, and site preparation. Even neglecting to include VAT in your materials estimate might result in significant costs. A comprehensive checklist and precise plans and specifications are your best option for avoiding sometimes omitted charges.

These are available in paper format, but mobile applications improve the accuracy and efficiency of these estimates. Certain mobile job estimators, for example, may do the calculations for you, saving you from having to manually add up numerous rows of services and supplies, and risk missing anything essential. And, in comparison to complex estimating programs that need purchase and installation on your computer, apps are far less costly and quicker to set up, making them suitable for both cautious and knowledgeable technology users.

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