Construction estimate template is a key point of construction business. It is a foundational principle in forecasting the cost of construction of a structure.
If you are a construction budget planner, estimating your construction cost will help you to determine your project’s feasibility, scope, and the necessary budget allocations.
Maybe you don’t understand what construction estimating is, the reason why it is importance and things about construction estimation.
So here, we will give you information about construction estimating.
What is Construction Estimating?
Construction estimating is a step of constructors budgeting which is calculating all the cost of construction project by measuring all of the quantities and then assign cost to those items.
Cost Estimating Component
Like other budgeting — you can read Project Budget article—, in construction estimating also have cost component and classify them to make it easier when calculating them.
There many ways to classify expenditures, but commonly it will categorize into direct and indirect costs.
1. Direct Cost
Direct costs are costs and expenses that are accountable directly for a specific activity in construction work. Some examples of direct costs are:
- field workers (aka labor)
2. Indirect Cost
Indirect costs are expenses of items that are not allocated directly for specific construction activities. These are called overhead costs. Examples of project overhead expenditures are:
- quality control
- security costs
- administrative costs
- temporary structures
- legal fees & permits
Another article about Budgeting : Business Start-Up Budget Template
Level of Accuracy in Estimating
The American Society of Professional Estimators classifies estimates according to a five-level system that becomes increasingly more detailed and reliable.
The accuracy of a cost estimate relies on several things:
- The quality of the project plan
- The level to which the estimator defines a project
- The experience and skill of the estimator
- The accuracy of cost information
- The quality of any tools and procedures the estimator uses.
Here is 5 level of accuracy in estimating:
– Level 1 Order of Magnitude construction estimate template
Made when project design has not yet gotten under way, you only use an order of magnitude estimate to determine the overall feasibility of a construction.
– Level 2 Schematic Design Estimate
An estimate produced in line with schematic design.
– Level 3 Design Development Estimate
An estimate made during the design development phase.
– Level 4 Construction Document Estimate
An estimate based on the construction drawings and specification.
– Level 5 Bid Estimate
An estimate prepared by the contractor, based on construction documents. The bid estimate is the basis of the bid price offered to the customer.
Things to include in a construction estimation template
Description and duration of Work
This is explaining what to do and what not to do. And you know that, time is money. You have to know when this project started and end, so when there is a change you will not lost your opportunity cost, additional labor or additional supervision.
This provision must be clear, so that there is no misunderstanding or misinformation in carrying out a construction project.
Material and Labors
Make sure you take into account that the cost of materials can change significantly between signing the contract and purchasing the materials. You are advised to have alternative backups related to the material you use, so that you can fulfill your customer requests.
Labor costs are not just paying for peacocks, they are also a factor that represents all of your various hiring costs, such as insurance, payroll taxes, benefits, Labor Company, continuing education, certification, safety equipment, etc.
Make sure you calculate the total cost correctly fixed price (also known as a bid proposal) or time and materials (also known as cost plus or estimate of cost). Understand and follow the payment terms in the construction industry (this can vary, but generally requires an initial payment of one-third of the total cost).
You also need to explain to the client regarding the payment deadline and the risks that may be faced if there is a late payment.
Always prepare and use your project invoice as a valid proof of payment between you and your client.
Sales and company contact info.
Make sure the salesperson provides your phone number and email address along with your contact info and company address. So that communication with clients will be easier.
Ways to Estimates your Construction Projects
After you get a project offer, then you have to estimate the construction cost of the project, then you offer it to your clients. You have to estimate the cost of construction well (beneficial for you and the client). Just in case, you must also provide Plan-b for the price quote proposal and the estimated price you provide.
Determine the time-line
Make a clear construction schedule or construction timeline. You can break down into sub-projects to help you define a timeline.
Do quantity takeoff
List each required material and calculate the estimated total cost for each sub-project or stage of project implementation.
Estimate the workforce
Calculate the working hours required for each sub-project/project implementation stage, then calculate the total working hours required, including the possibility of overtime, and then estimate the labor costs.
Add equipment and overhead to final estimate
Add the estimated total equipment and overhead costs to account for fuel, maintenance, and other costs.
After that measure all of the labor cost and materials cost to get the total cost.
When your client accepting your bid proposal and your estimation construction cost, congratulations for you!
Now you can run your project!
But is it enough if you just run your project?
Mmm, I think you should pay your attention to your budget execution, because you don’t want your expenses to grow beyond your budget or having trouble when making project report because your expenses are out of control, right?
Then what should you do? and the answer is manage your budget. By managing your project well through controlling it, tracking and other managing activities, it will be easier for you when compiling reports and evaluating it.
You can get the information by reading our article about Project Management Budget: How to Manage it here.
Here you can download printable free construction estimate template pdf for free.