Calculating an accurate project estimate is one of the toughest challenges in the construction process. If it is too high, your competitor may be awarded the bid. If it is too low, you may have little chance of earning any profits from the bid.
This keeps construction companies on their toes trying to arrive at the correct estimate in the most accurate way possible.
Before you send in an estimate, you need to research any cost you may incur while developing the project. Generally, you would apply a markup to this figure and inform the customer of the final amount.
Your objective is to ensure that the final payable amount and the pre-construction estimate are almost the same.
Moreover, you need to do these calculations as soon as possible. If you do not, expect your competitors to be the early bidders.
Here are seven ways to make your construction estimates more accurate:
Choice of Software
Choosing the right software is important when it comes to determining an accurate bid. Cloud-based software with an array of necessary features help you arrive at the right figure.
Every solution available on the market is different. Get one that meets your work requirements and most importantly your needs.
Choice of Estimator
The work approach of an estimator invariably affects estimating. Estimating is a complex process and anyone not really accustomed to it, will struggle at it. Select someone who knows construction management and has the ability to learn about estimating software. An estimator who knows the job of everyone working on the project is well aware of the advantages and the limitations of the software would be in the right position to handle it.
For optimum accuracy, keep people who will be responsible for the project, in the loop. Promote an environment where the staff is under no pressure to commit to unrealistic figures for securing a bid. Honest input regarding estimates and a reliable software solution are keys to accurate figures.
Proper Gathering of Requirements
Instruct your project managers to interview clients in detail, to communicate all relevant information. If the client themselves are unaware of the specifics, past projects may be a good source of getting requirements.
Values in Opposite & Extreme Ranges
It will be helpful for estimators to develop a variety of values for optimistic, nominal and pessimistic estimates. When negotiating the contract, this provides estimators with a clear insight regarding the acceptable figures.
In a construction project, various parts and areas of a company function in tandem. Estimators need to have continual communication with people working in different departments.
Expertise of Finance & Legal Experts
Apart from the core construction work, it is important to seek advice from finance and legal fields. A legal expert, for instance, can provide estimators with information regarding possible repercussions in a case of incorrect estimation and/if the final payable amount differs.