Construction Project Estimates Require Analysis and Budgets

Site Preparation for Construction Project Estimates

Project estimate – a detailed prediction of the total cost to complete a construction project 

Getting your (estimating) site prepared means you will have an early indication of the anticipated costs, which will help set a benchmark for what the project could realistically cost.

This process includes tasks like: 

• Developing material takeoffs

• Asking for supplier quotes

• Evaluating labor needs

• Accounting for overhead and profit. 

  
  

Foundation for Construction Project Estimates

Analyze – to examine carefully and in detail to identify causes, key factors, possible results, etc.

Moving to the foundational aspect of building construction project estimates means moving beyond a superficial understanding to an inclusive and in-depth analysis of what it will entail. 

This process involves factors like: 

• Assessing scope

• Considering schedule 

• Accounting for market fluctuations

• Developing a detailed cost analysis (including direct and indirect costs) 

• Considering contingencies 

• Evaluating escalation factors (such as inflation, fluctuating material prices, labor shortages, and changes in regulations)

Framing for Construction Project Estimates

Budget – a plan for the coordination of resources and expenditures

While the estimate sets a preliminary cost groundwork, the budget explains the actual spending limits. Remember, the budget is a tool for managing costs from end to end.

Think of the budget as a financial blueprint. It measures actual expenses against projected costs. And like actual blueprints, it is subject to adjustment based on changes in project scope, authorized change orders, unexpected conditions, supply chain disruptions, or other market volatility issues.

Why Bother With Construction Project Estimates

Construction project estimates are not for the faint of heart, the lazy, or the fly-by-seat-of-your-pants type of person. They take courage, time, and lots of brain power. So, it is best to keep in mind what the goal of a construction project estimate is. 

Simply put, the goal is to create an accurate estimate that helps determine project feasibility and inform bidding decisions. And for some, the goal of a construction project estimate might include securing funding. 

Comparing Vehicles to Construction Project Estimates

Here is a clear analogy to why construction project estimates require analysis and budgets. Let’s say you have the finest gas or diesel-powered vehicle on the face of the earth, but the trip will take much longer than expected if you don’t put fuel in the tank. And, if the same “fine vehicle” has been powered (fueled up) but not lubricated, disaster is just a short drive away. 

In the same way, if your construction project estimate is not powered and lubricated with analysis and a budget, get ready for a driveway view or a catastrophe just around the corner.

If you would like to learn more about how the team at The Profit Constructors can help you set your construction project estimates on the right path, give us a call at 866-629-7735

Ambitious Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:

• Clients and customers

• Employees and subcontractors

• Vendors and service providers

• Governmental entities 

Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:

• Remain informed

• Avoid hassles

• Reduce risks

• Be future-ready

Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735