In all of the different phases within a construction project’s lifetime there is construction estimation. It’s very important to estimate the cost of building a construction project accurately, arguably one of the most important components in a project. Estimation itself refers to the estimation of the costs associated with commencing and completing the project including many variables and components of the project such as material and labour. 

Actually estimating the costs associated with a project before commencing it seems like common sense. It is however intriguing to know that in a less advanced form construction estimation as we know it today dates back less than a few hundred years to the 18th century.

It clearly was a great addition to the overall construction process as it is a must in commencing a construction project. It has become standard and a core part of construction. Obviously, going through changes through the years like any other method or practice in construction everything evolves with time.

In order to discuss how we should go about estimating a construction project, we should create a solid foundation by delving into what exactly construction is. So what is construction estimation? This is a question that many people ask, and it can be difficult to find a good answer. Construction estimation is the process of figuring out how much something will cost to build. It involves estimating the cost of materials, labour, and other associated costs. There are many different ways to do construction estimation, and it can be a complex process. 

As aforementioned a fairly key component of construction projects is the estimation/prediction of the expenses expected to be incurred in the duration of the construction project. It is important to note no estimate can be 100% accurate, which should be evident in the word ‘estimate’. This does not mean that the estimate should not be accurate. A builder should strive to be as accurate and precise as possible and to the highest standard. 

Another thing about construction estimation is that it isn’t always done by one individual, in fact, it can be done by a team of people, which can become a tiresome ordeal depending on the method of estimation being used like spreadsheets which are not conducive to collaboration.

estimate the cost of building a construction project

Construction estimates are also useful for the bid process of a construction project. This is where contractors and builders submit a bid with an estimation of the costs of the project to the project owners summarising the costs expected to be incurred in the duration of the project. With larger companies or government contractors however, a larger entity will receive various bids from different hopefuls and decide the winning bid to proceed with.

When it comes to the different tools that are out there available for estimating construction costs, there are several routes one can go. Builders can choose more tried and tested routes such as spreadsheets or they can employ newer construction estimation softwares that can take their projects to a higher level.

As aforementioned there are tools such as spreadsheets that can be used for construction estimation. Using spreadsheets is a more outdated method of doing construction estimation. There are gaping holes in its efficiency. 

Surprisingly spreadsheets or similar forms of it are still commonly used to conduct estimations. Despite being commonly used, there are far better alternatives out there and there are inherently a lot of issues with utilising spreadsheets for construction estimation.

Spreadsheets can be used as a means of recording all the data and portraying it for the customer in an appealing way. Data is entered into fields and you will have your own calculations and formulas for figuring out the costs and margins of your project.

As aforementioned spreadsheets can have issues, one glaring issue being that it is prone to human error. There is very little in the way of minimising human error and mistakes that occur. The larger a project, the larger room for error there is as there are more items and materials involved. 

Spreadsheets also do not let you standardise your estimation process by using data from previous projects. You must also look up any information you may want to use over and over again such as price lists you have from different suppliers and painstakingly add them if need be. Due to this the process is very manual and is not very efficient. 

Builders that employ the likes of a construction estimation software can avoid the aforementioned issues to a much greater degree. A construction estimation software or construction management software containing estimation tools aims to help streamline and smoothen the process of creating cost accurate estimates that are based on labour, materials, equipment and other cost factors with line-by-line and quantity estimates of the materials.

Construction estimation softwares are user friendly systems that do a lot of the work for you. It should simply take you through the steps of the estimation, making the process smoother. 

Standardisation of the estimation process is a staple of a quality estimation software as it will allow you to create and re-use estimation templates with categories and costings. Not only this, but information you want to use such as items from price lists attached to certain suppliers or building recipes should be saved on your construction software and accessible as you create your estimations. 

In terms of actually creating a construction estimate, there are some factors to take into account such as a variety of costs that may occur in your project. We will look at  some important cost considerations that may impact your project.

When conducting a construction estimation, you must take into account different factors as well as cost considerations for various costs that can occur. For the sake of conciseness, we will analyse some of the more important cost considerations that are central to construction estimation. These costs we will look at that potentially make up a considerable portion of the expenses are subcontractor costs, labour costs, construction material costs and overhead costs. 

Subcontractor costs

Subcontractor costs are the amount of work the subcontractor will do and how much their rates for their work are. Subcontractor examples include tilers, electricians and other professionals that will be contracted to work on different parts of the project. It is also important to keep in mind that subcontractor costs can change over time. This is why it is important to get updated estimates from time to time. This way, you can be sure that you are not overpaying for the work that is being done.

Overheads

Construction overhead costs are those costs that are incurred in addition to the direct costs of construction. Overhead costs can include estimation costs, project management fees, and other indirect costs. Construction overhead is typically a percentage of the total construction project cost. In order to control overhead costs, it is important to have a clear understanding of all the factors that contribute to overhead. This includes a thorough understanding of the project scope, schedule, and budget. Additionally, effective communication and coordination between all parties involved in the project is essential. By keeping overhead costs under control, you can ensure that your construction project stays on budget and on schedule.

Construction material costs

Construction material costs are one of the most important factors to consider when estimating the cost of a construction project. The cost of construction materials can vary widely, depending on the type of material and where it is sourced. It is important to get accurate estimates of construction material costs before finalising any construction plans.

 There are many different types of construction materials, each with its own price point. Some common construction materials include wood, concrete, metal, glass, and brick. The cost of these materials will vary depending on the quality and quantity required for the project. It is important to get multiple estimates from different suppliers before making any decisions.

Labour costs

In construction estimation, you will need to know how many workers are required to actually complete the project and how many hours they will need to complete it. 

Construction labour costs can vary significantly from one project to the next. Estimating construction labour costs can be a difficult task, as there are many variables to consider. The type of labour required, the experience of the workers, and the location of the project can all impact labour costs. 

Construction estimation is a complex process, and construction labour costs are just one part of that equation. When estimating construction labour costs, it is important to consider all of the variables involved in order to get an accurate estimate. With careful planning and execution, you can ensure that your construction project stays on budget.

To summarise, in order to conduct a construction estimation, once there is a list of materials all the costs must be determined for all the other factors such as labour, equipment and overhead costs etc. They should be put into categories appropriately for the sake of organisation and an estimate should be produced based on this.

A good construction software makes use of good project management functionality, estimate and financial/accounting tool functionality, job management, scheduling and planning and support functionalities and more. WunderBuild is a construction management software that aims to provide all of these functionalities and more to bring out the best outcomes for a project. 

It is currently offering a free trial, visit here to try WunderBuild for free.

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