How to Estimate Construction Costs?
The process to estimate construction costs is comprehensive and it needs to be flawless. Basically, the estimates provide a projection of how much the project will cost you. The more accurate estimates, the more successful projects you can execute. To carry out the estimation process, various methods of estimation are used. Every contractor and builder uses cost estimates according to their needs. However, the construction estimation is not an easy task. It demands proper skills and experience to judge the future cost of the projects.
Inaccurate and incompetent construction estimating processes derail the whole project. Because, when things go out of budget, the results lead to frustration and missed timelines! It is true that budget and timelines are the most critical factors for builders and contractors which gives them a huge stress. Thus, to estimate construction costs on point, one must rely on preliminary estimates to carry out project operations! Without any further ado, let’s discuss how to estimate construction costs.
Pluralistic categories of construction estimates
Conceptual Estimate
This type of construction estimate uses engineering concepts and does not count the materials individually. Mostly, these types of estimates are prepared in the conceptual phase of the project. Well, in this phase, the project drawings are not completed. Various contractors use it for the residential estimating process to get preliminary estimates in the initial planning.
Design Estimate
As from the name, you can understand that these types of estimates are created during the design phase of the project. The estimators estimate construction costs on the basis of schematic design of this type. When preliminary estimates are completed, a more comprehensive estimate is followed by the design team.
Budget bid estimate
A budget bid estimate is prepared to get a rough idea about cost estimating with limited information about the project. This type of estimate helps contractors and investors to decide about the projected outcomes. However, this type is important for the commercial estimating process as it includes more detail and more information.
Efficient Construction Cost Estimating Methods
An efficient construction cost estimating method to accelerate the speed and enhance the overall accuracy of the project results. Such as, it can be analogous, parametric, bottom-up estimating and more! Well, the most important thing is to learn about the difference between these methods.
Let’s say that a feasibility estimate is generated in a parametric estimating method. On the other hand, the bid estimate is extracted from the bottom-up calculation method. In short, every type offers unique functional properties to carry out tasks.
However, the following are the estimate construction costs methods:
1.   Analogous estimating
In this type of estimating method, the estimators or contractors judge the cost on the basis of past similar projects. So, the method depends on the expert judgement and the historical data of the projects. But, you must know that every construction project is different from the other so two construction projects can never be the same. In addition to that, an analogous estimating method is implemented in the pre-construction phase with incomplete information.
2.   Parametric estimating method
The parametric estimating method is an advanced form of analogous technique that uses the statistical relationship of historical data. The main difference is that it needs more information to estimate construction costs. For example, if you know the error margin, square footage of the space, and the average cost then you can estimate the expenses within budget. Complex projects like industrial estimating consist of countless challenges that need to be accounted for accurately. So use the right method to complete the project under budget.
3.   Bottom-up estimating
In this type of estimating method, the contractors or estimators start by working on small chunks or tasks of the project. This method is often also called work breakdown structure WBS. Once all the smaller tasks are finished, the individual estimates are aggregated to get the desired outcomes! No doubt it’s a lengthy process but contractors can get enhanced accuracy!
4.   Three-point estimate method
In this type of method, three types of cost estimates are identified. The first one is known as an optimistic estimate, the second one is a pessimistic estimate and the last is the balance of these two estimates. Moreover, with the help of the right formulas, the expected cost is generated and clarifies everything.
Hence, Professional estimating companies in the USA such as SMA Estimating LLC have trained their experts to use the right method according to the project requirement. That is why, contractors outsource their needs to such professionals to complete the project without financial stress! So, you must also get out of the manual methods and rely on advanced estimating services!
Final verdict!
To sum it up, it is evident that to estimate construction costs you need the right method and complete the projects efficiently. This means you don’t have to feel like a guesswork rather it’s about matching your method with your project stage. Just be clear about your aim and set a project budget before the estimation process. It all depends on the level of information you have to apply the right technique. In case of complex situations, you must rely on experienced companies such as SMA Estimating LLC to carry out tasks!
