The Importance of Construction Estimates
Construction estimates are the groundwork of any construction project. Estimates are what hold everyone involved to a predetermined budget and time frame for the project completion. Profits in the construction field are known to be very thin, so it is vitally important that whoever oversees the estimate gets it right the first time. One small mistake can mean the difference between a profit and a massive loss.
What is a construction estimate?
A construction estimate is a detailed plan that is put together stating the cost, the time frame, and all aspects of the project. This should include in detail, all the time, cost, labor, material, and other expenses for the job. The estimate should also include a contingency that will help offset any unforeseen circumstances.
There are different levels of estimates, but to complete the final estimate the company that is in charge will have to have all the information possible including the plans, details, and the estimates of any subcontractors working on the project before they will be able to complete the estimate. Once completed the reader should have a clear detailed idea of what is to be done, what it will cost, and how long it will take.
Why an estimate is so important?
Construction estimates will be referenced until the end of the project to keep costs, design features, and time frames in check. Whether you’re the buyer or the builder the construction cost is a huge component. The estimate will be a predetermined number that both sides will have to agree on before the project can begin.
Construction projects are generally bid upon by several companies which force the prices to be competitive. If the company incorrectly bids a job, then that could spell disaster for their profit margins. Or result in them attempting to charge their loss to the client causing an unsatisfied customer, and in worst-case scenarios a legal dispute. In which case the official estimate will become even more important than before. That is why whoever is estimating the project must be experienced and knowledgeable in estimating.
Many factors must be included for the estimate to be accurate. Such as location, environmental factors, building codes, job duration, material costs, labor fees, and special equipment involved. The customer receiving an estimate is the first step of the project. The customer will have to receive the bid and then compare the estimate to their budget. This is something that can change the scope of the estimate before the project even begins.
Every construction project should have an accurate and official estimate completed before the project begins. This will give the company in charge a budget to stay within, and the buyer a solid number of what it will cost so they can arrange their finances. Construction estimates also serve as an agreement between the two parties in case any disagreements come up, they will be able to refer to the bid and act accordingly.