What are the most important factors in construction estimation? That’s a big question.

In the process of constructing a structure or building, there are many skilled individuals involved from inception to completion. Among them is one of the most important, the construction cost estimator. A construction project must be estimated for a whole host of reasons, namely how can you construct something without any idea how much it costs? What if you fall short of funds long before completion?

It is obvious that without a construction estimator, estimating the costs of a project effectively that a construction project simply would not commence. This signifies the importance of construction estimation itself. 

Construction estimation as a practice can be dated to the 18th century in a more primitive form. It was effective then and it is effective now as it is still being used and is a must for a construction project to be successful. However, nowadays the process is a lot smoother and has evolved significantly since it’s early days when it was introduced.

This blog aims to highlight the important factors in construction estimation to consider. However, before we dive into that we must first establish what construction estimation is. Construction estimation as aforementioned is done by the construction estimator. However, it may also be done by more than one person with several people working together collaboratively on the estimation of the project.

Regardless of whether construction estimators might work in a team, they still work with various other professionals in a construction project such as architects, contractors and vendors/suppliers. Construction estimators will work to estimate with as much accuracy as possible the expenses a project will incur or the costs of a project to put it plainly.

Construction estimators estimate various costs of a project such as the materials required, the subcontractors and the labour costs of a project. Mainly, how much will it cost to hire labour and for how long as well as how much will the materials used in the construction process cost. Without these costs a project has no budget and is aimless. 


This leads us to our first important factor to consider in construction which is the accuracy of a project. Construction estimation while seemingly sounding simple, is quite complex and as a result it is even more important it is accurate. Obviously a project cannot literally be 100% accurate as the word estimate denotes that it is utilised to give an approximation. Nonetheless, it should be very close to that 100% as close as possible because a lack of accuracy in a construction project can be devastating.

Construction estimates are heavily linked to a project’s ability to succeed. If a project is inaccurate it can be a money pithole draining resources and cost the client dearly in terms of expenses. This can lead to a project’s breakdown and failure as well. 

Construction estimation is a complex process where one must weigh and understand different factors in a project and be aware of possible outcomes as well be prepared and wary of the unknowns.

Different cost considerations

Another important factor in construction estimation to consider is the different types of costs that may occur. For the sake of brevity we will look at some of the more important cost considerations that are central to construction estimation. 

Construction estimators must accurately estimate the costs of the project as without this profits cannot be made. By knowing the costs you can add a sufficient margin on top to achieve your desired profits. However, it is too big of a cost, and you may not win the project bid and if the costs are too low you are at risk of a loss on your project.

Some of the costs in construction that would make up a large chunk of the expenses are subcontractor costs, labour costs, construction material costs and overhead costs. We will have a brief look at each of these.

Subcontractor costs

Subcontractor costs usually are not as hard to come up with if you have previously worked with a particular subcontractor as you would know their costs. The costs of the subcontractor is 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 parts of the project.


Overhead costs can vary from project to project but there will be staples for your construction project such as rent, staff costs and utility costs. These tend to be costs that don’t fit into any of the obvious categories of construction estimation costs. 

Adding these costs to a project is imperative to a project’s success as these costs can add up and an estimation must be accurate to ensure profitability.

Construction material costs

The different construction materials and their quantities are found on a construction take off. A takeoff contains a list of different materials, how much of them are required and their costs. Along with this are storage costs which will be factored into the whole costs for the construction materials. 

Different factors also affect the costs of the materials such as location of the project, where the project site is. The market for those materials is also an important factor.

Labour costs

In construction estimation, you will need to know how many workers are required for the project. The costs are determined based on the mandays. Mandays is an important measurement on the amount of labour needed for a project based on the number of individuals working and the number of days they will work.

Mandays can be difficult to estimate as there are different factors such as the different types of work, site conditions for the project, rates for labour for the different types of work being done etc. 

Tools for estimation

The tool that is utilised in construction estimation is also an extremely important and overlooked component of construction estimation. That is, what will you use to conduct the construction estimation. 

In construction estimation there are different tools that can be employed to help conduct the estimation of the construction project. More specifically within construction estimation there are four categories of softwares known as spreadsheets, takeoff softwares, estimation softwares and business information modelling.


Spreadsheets are still commonly used for construction estimation surprisingly as they are by far the most outdated method used for construction estimation and are of the different forms of estimation, the most inaccurate. 

This is due to the nature of spreadsheets where data is input into each field painstakingly, there is plenty of room for human error. If there are multiple people working on an estimation this can make it more complicated to collaborate.

Takeoff Software

As aforementioned construction takeoffs provide the costs of materials along with any other associated costs. Seemingly, it is simple sounding, but it is anything but simple as it is actually a time consuming task that requires one to be highly skilled. However, due to this, there are now softwares that cater to the preparation of construction takeoffs known as take off softwares.

Construction takeoffs are produced the same through a software as done manually, why the software is necessary is not that the steps to making the takeoff are different, rather it automates them, streamlining the process of producing a construction takeoff software and making the process a whole lot easier and less time consuming.

Specialised Estimating Software

A construction estimation software should enable builders to effectively estimate the costs of the project and should streamline and really pull along the process of creating accurate estimates. The estimates should be created based on labour, materials and other cost factors of the project and it should create line-by-line and quantity estimates of the materials utilising pre-determined formulas and calculations. 

Building Information Modelling

Building Information Modelling or BIM for short is a collaborative process in which various different parties including contractors, architects, engineers and even real estate developers to name a few potential users are enabled to work together to create a structure or building digitally.

BIM produces a 3D representation of a building but contains a plethora of information on the building from materials to logistics, it can also be used to analyse existing buildings for the purposes of renovation. 

Estimation can be done through the use of BIM software as well, so it is a form of estimation itself. It is done through the mapping of the components of a 3D building model to materials and labour as well as equipment costs. 

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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