The first step is to determine why you exceeded your estimate. Was the cost of your materials higher than you expected? Was the work more difficult than expected? Explain the situation. Next, come up with solutions for the problem.
Then, you can discuss this with your customer. Maintaining an open, honest dialogue with your client and building trust is always the best thing to do. Explain what happened and why. Together, come up with possible solutions for your client. You may have to make some other cuts. It’s best to come up with a solution together.
You might consider becoming more alert to unexpected costs in the future. Even contingencies can be built into your estimates to cover unforeseen expenses throughout the entire project. Review the budget regularly throughout all your projects in order to Cost Estimating Services identify problems as they occur.
An accurate estimate will help you to start a project successfully. Construction estimating is best done by a group of experienced estimators with an in-depth understanding of your project. This stage can be a major factor in the bottom line of a business or contractor. A survey by QuickBooks and TSheets found that one out of four construction firms would cease to exist if only two or three estimates were inaccurate.
Here are some tools to help your team create a successful construction estimation process. This will lead to new opportunities and exceptional relationships with clients.
Although construction estimates may not always be accurate down to the last cent, success in a project begins with an accurate estimation. Otherwise, you may be exposed to ethical or even legal risk. In March of this year, for example, the SEC began a federal investigation into two major construction contractors in order to determine why their estimations were incorrect.
Estimators are usually the first team to begin the initial estimation process of large construction projects. Estimators gather documents such as plans, proposals and specifications to estimate the construction project.
A construction estimate represents the overall cost of the job, including all costs, such as materials and labor. There’s another common misconception about the difference between an estimate and a bid. The bid must be a completed offer for a construction project to move forward. A contractor will often specify a project’s timeline and a price for the construction in a bid. Before you submit a bid, an estimate will usually be made.
There are a few terms that you should understand to help guide your estimation. These nuances in construction are essential to explain to clients your method, as well as to communicate internally within the industry with partners, vendors and other professionals. Speaking the same language can reduce confusion and errors.
The first step is a quantity takeoff. The cost estimator will identify and calculate the materials required for the project. It is important to get the takeoff right, otherwise there may be errors in your project. The estimator then uses their knowledge to calculate the number of labor hours needed to finish the project. In order to accurately determine the number of labor hours, it is important that the team’s basic wage rates are correctly identified. Cost estimator also takes into account overtime and additional hours.