The process of construction estimating entails anticipation of the expense for building a physical structure. It would be pertinent to mention here that the step has been deemed essential and highly important in the construction arena. Estimators require being accurate, as it would affect the profit margins if the direct and indirect costs for the project were different even slightly. Every successful project begins with an exact and accurate cost estimate. You would be required to know about the basics of estimating and learn the important role in delivering successful commercial construction projects. 

Understanding the importance of construction estimate 

Accurate estimates help you win new businesses and projects for companies. During the bid estimation stage, take-offs, construction documents, and other direct costs would be used for enabling the estimator for determining an approximate cost of the job. 

Builders and customers would look forward to knowing about the price of the project, as the financial effect of expenditure tends to overrun and hampers the completion of the project. It would be in the best interest of both parties to spend time estimating and researching the expenses. You do not wish to lose money. Moreover, construction estimating would prove to be a helpful tool in project management. 

Cost estimating the essential factors 

Cost estimating on a project has been responsible for the project manager, estimator, or the staff based on the size, type, and scope of the project. Every project has been different. Therefore, the estimator would need to look at the take-off for measuring time, labor, and materials. Cost estimators have been the total expenses and costs associated with the project from the beginning to the end. Several ways could be used for classifying expenditures. However, great estimators would differentiate them into direct and indirect costs. 

• Direct costs 

These are the expenses and costs accountable directly for a particular activity in the construction work. Find below a few examples - 

• Materials 

• Equipment 

• Labor 

The labor would be inclusive of field workers. 

• Indirect costs 

These expenses or the overhead costs of items would not be allocated directly for specific construction activities. A few examples are - 

• Security costs 

• Quality control 

• Administrative costs 

• Utilities 

• Legal fees and permits 

• Temporary structures 

Determining budget from estimates 

When you establish a budget, rest assured it has been deemed vital in construction management. The project or estimator manager calculates the total costs of the project along with levelling the funding and budget allocations essential for completion. The calculation results in the creation of the budget. The project manager would be required to estimate the entire cost by using the estimate. It would also be inclusive of risk management activities and reserves. 

The conclusion 

It would be pertinent to mention here that construction estimating has been playing a significant role in project management. Companies should invest in technology and resources for making this role effective. Construction estimates are essential aspects to gain bids and win projects.