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Exterior Contractors

11/03/2022

How to Estimate Construction Costs

How to Estimate Construction Costs

Being able to create an estimate is the backbone of all construction jobs. Without one, you can’t place a bid, and without a bid, you can’t grow your business. Creating a professional estimate goes beyond the calculator and can be a real art form once perfected.

In this article, we’ll break down five crucial tips on how to create a construction estimate that are often overlooked. Keep these in mind for your next project and your estimate will stand above the rest!

1. Create a Productive Environment for the Construction Cost Estimator

Estimates involve a lot of math, measuring, and counting. So if you or your cost estimator are in a chaotic area, it’s easy to lose count. We recommend creating a dedicated space for estimating or finding a quiet area in an office. Having a calm space where estimating can be done efficiently and correctly will reduce your number of claims and change orders.

How do you create a space that works for you? That’s up to you to decide! It really depends on how you work best. Is that with headphones jamming to your favorite music, or with noise-canceling headphones? For some people, locking themselves away to not be bothered is the only solution. Whatever it is, be sure to create the conditions that help you focus and concentrate.

2. Use Accurate Software to Guarantee Correct Costs

You don’t want to bid on a project with an underpriced or overpriced estimate. Avoid that possibility by using up-to-date software that can perform digital takeoffs and estimates accurately. With HOVER, you gain accurate measurements and 3D visualizations from a simple blueprint upload.

Upload a digital copy of your blueprint to HOVER’s software and get to-the-inch measurements in 24-hours or less. You’ll reduce time spent on every bid and have an accurate estimate that will make you stand out. Plus, when you present your estimate to the customer, you can pair it with a dynamic 3D model of their home to really wow them.

3. Utilize Labor Production Data in Your Local Area

Labor cost is about half of any construction project. When using a third-party labor database to pull general labor costs, your estimate won’t be as accurate as it could be. Getting that pricing information correct is critical.

Rather than using abstract numbers, you can make the pricing database in your cost estimation software more accurate by adjusting it to your region. Then, if you have labor productivity data from your own company and subcontractors, further adjust your labor costs with that data.

We recommend adjusting it even further. You can even go another level, and tweak it to consider productivity factors like what season you’re working in or if you're in a more rural area.

4. Verify Pricing for Non-Standard Materials and Fabrication

An estimate is easy if the homeowner wants a simple gable roof with standard shingles. But if they have a mansard roof and are looking for a unique material, your estimation just became a little more complicated.

New materials and new methods need people trained in their use. So, as you’re moving through your estimation, be sure to keep an eye out for anything that needs special consideration. Especially if something needs to be built offsite. Factor in the fabrication of this special piece and the time needed to tie the item into your existing work.

5. Analyze and Compare Estimates of Specialty Contractors to Ensure Accuracy

If you’re including subcontractor pricing in your estimate, be sure to check their prices against industry-standard installation costs. You can get these from your cost database. This helps you find areas where they may have made mistakes in their own estimates.

HOVER’s software is an easy platform for labor management. It compiles labor lists for multiple trades while using third-party data to integrate worker’s compensation.

HOVER creates interactive 3D models that can be used for measuring, designing, and estimating. With our exciting new integration with Xactimate, those highly detailed structured 3D data and measurements are automatically imported into Xactimate’s database. You’ll then be able to quickly pull together an accurate estimate for your customer!

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