Construction Estimating – Why is it Important to Me?  

Check Out Nick's New Book On Amazon

Perhaps more so than in any other industry, effective estimating techniques play a major role from the outset of any project right through to its completion in the construction industry. Because of the high cost of equipment, tools and labor relative to this particular trade, a wise construction contractor will make diligent estimating an integral part of his business.

Economic fluctuations in both market and labor costs are definitive factors that must be taken into consideration when estimating the costs relative to any particular project. However, there are a myriad of other variables that must be evaluated when pricing a job – regardless of its scope. One incorrectly assessed job can result in a devastating loss for any business and for the small to mid-range contractor the result can be catastrophic. That is why efficient and viable construction estimating is so important to the well being of any construction business.

Most contractors must be able to assume a leading role in a variety of tasks in order to remain solvent in a rapidly changing market. This means that costs that include time, materials, labor and general management have to be considered determining factors when pricing out a job. The ability to realistically estimate and oversee tenders from their inception to their completion is a challenge for all contractors, regardless of the type, size or area of operation.

Some small contractors are responsible for all aspects of every job they bid on – from estimating how much the actual job is going to cost to regulating costs and activities associated with bookkeeping, staffing, supervising and time allocation for each and every project they work on. Of every function they assume responsibility for, estimating is by and far the most important component as under estimating can result in monetary loss, while over estimating may very well result in the project being awarded to another company.

In today's competitive marketplace gaining an edge over other bidders can be a slippery slope. The very experienced general contractor may be able to quickly provide an accurate estimate of a particular job based on prior experience and his lifelong affiliation with subcontractors he knows and trusts. However, for most contractors the scope and variety of jobs they must bid on to stay operational often requires a more technical edge. Estimating blind is sure to lead to failure and that is why most general contractors have learned that they must be fully cognizant of each and every variable connected to their business in order to make an effective bid on a job.

Regardless of whether a contractor decides to estimate a job by jotting down measurements and other relative information with pad and pencil, or if he undertakes the pricing of a project via one of the many excellent computer programs available for this task, the most important module for any job begins and ends with a realistic assessment of all the costs associated with the job.

Effective construction estimating is the catalyst that feeds the fire of any successful construction project. Not only is it important to perform this task with profit in mind, it is absolutely essential to do in right in order to remain in business.