People working in the construction industry know that estimating is one of the most important and difficult jobs in construction. Whether you win or lose profits depends entirely and how accurate your estimates are. A lot of construction companies end up making less profit than they expected based on their estimates. If estimates do not match up with the final project costs the company ends up losing profit or even accumulating loss.
Although one bad estimate might not put you out of business if you have to deal with a string of unprofitable projects, your company would be in serious trouble. It is not easy to get accurate estimates, you need to account for a number of different variables. Even a couple of mistakes might throw your estimates off completely and you will end up with a bad bid. The following are some of the most commonly made construction estimating mistakes that you need to avoid.
Failing To Conduct a Site Visit
When you are thinking of bidding on a project you should attend the pre-bid meeting and visit the job site. Most of the time it is mandatory to visit the site at least once before you can submit a bid. All job sites are different and if you are not aware of the site conditions beforehand you might find yourself having to deal with unexpected, and costly issues after construction begins.
Make sure to take measurements and inspect the topography during your site visit, it is important to take some soil bore samples if you have not done that already. You should also make sure that there would not be any trouble transporting equipment and materials to the site. Apart from the road access and traffic, you should also find out about the locality’s Environmental Protection laws that you will need to follow.
Inaccuracies in the take-off can really screw up the estimates. In order to determine exactly how much materials and supplies will be needed, you need accurate take offs. If during takeoff you fail to get accurate measurements or miss any items, it will result in you either underestimating or overestimating the project. The result will be that you will either not be able to win the bid or you will win a bid that would not be profitable for your company.
Costs of Materials and Supplies
It is quite difficult to get an accurate estimate of the construction materials and supplies cost for construction projects. Inflation and rising fuel costs impact the price of materials. We have seen how the construction building materials prices have been fluctuating dramatically in the last quarter. Supply chain issues and uncertain market conditions make it hard to determine if the prices for materials will stay stable from the time you start estimating till the time that construction begins. That is why you need to establish good relationships with your construction product manufacturers and suppliers so you can lock in accurate prices while creating an estimate for the project. Whether you are looking for construction materials or caterpillar bulldozers for sale, it would help to have a good relationship with the supplier. They might also guide you towards better alternative materials that you should use for your project.
It is one of the most difficult things to nail down accurately when you are trying to get an accurate estimate for your project. According to surveys, labor is the most expensive project cost and with so many variables in play, it becomes quite difficult to nail them down. When you are estimating labor costs, you need to account for a number of different factors such as the worker’s experience level, productivity, and rate of pay.
While experienced workers have a higher salary, they are able to get more work done in less time than workers with less experience who often make a lower salary. When you are estimating labor costs, you need to determine the hours it takes them to perform a certain task and use that to estimate labor costs. You also need to determine if there are any prevailing wages for the project that you are working on. In order to get more accurate estimates for any future projects you should make sure to keep a record of job costs, particularly labor costs. If you have any historical data available you can use it to get accurate estimates for your project.