You’ve got a client interested in what you can do for them but now it’s crunch time, they want an accurate estimate. At first glance this may not seem too difficult; after all, you know your industry, you understand the project and you’ve got an accurate set of plans to work from. But there are several hurdles that could trip you up.
Top 4 challenges in estimating
Time is limited when it comes to returning a detailed estimate alongside preparing and submitting tenders, running multiple projects and dealing with clients. You don’t have weeks to play around with stick estimating, you’ve often only got a matter of days to return accurate estimates.
With growing time pressures, the risk of introducing errors rises, such as underestimating or missing out certain costs altogether. In a short amount of time, you need to find out the costs of materials needed, man-hours, subcontractors and rental or purchase of items. Fail to do this accurately and you’ll end up paying the price in terms of time and money.
Even the best-laid project plans can go awry. You’ve likely had to manage situations in your past projects that weren’t initially identified in your estimates and ended up cutting you into your profit margins. When it comes to generating your next estimate, this past experience needs to be translated into quantifiable risks with values added to those risks, so you won’t end up with dwindling profits during the course of your project.
3) Client demands
Clients or their professional teams can often push back on estimates, questioning your approach and your numbers. Consequently, they may pressure you to discount your works, chipping away at your profits or even wiping them out altogether.
Large projects come with considerable documentation, which needs to be fully read, analysed and priced. Irrespective of project size, highly technical documents and specifications often require expert knowledge. What’s more, the more complex a project is, the more detailed the breakdown of costs will need to be. Likewise, specialist works will require in-depth knowledge and understanding to arrive at accurate cost estimates.
This level of knowledge simply isn’t always available in-house and so, greater time, effort and resources have to be spent investigating the nuances of complex, large and/or specialist work, which still does not guarantee the reliability of resulting estimates.
While the challenges of estimating are considerable, it can be made easier by taking a different approach, namely getting expert help. Yes, this means outsourcing and that comes with a price tag but given the financial consequences of poor estimating and the time you’ll save from doing it yourself, you may find this approach actually saves you money. There are several benefits you stand to gain:
The services of a dedicated estimator
Outsourcing your estimating means your project will be assigned to an estimator whose sole focus is to generate cost estimates for your project. They will handle contacting suppliers and subcontractors and collecting the resulting quotes. They will cross-check everything for accuracy, setting you up to complete your project on budget. And they will do all of this without distraction, greatly reducing the chances of costly errors being made.
Access to a vast knowledge bank
An estimator’s living is built on staying on top of all of the latest guidelines and rules in the construction industry. Procuring their services means you don’t have to worry about what’s changed and what’s best practice when it comes to compiling your estimates.
Spending 12 months a year carrying out cost estimates, they accrue specialist knowledge and consequently understand the nuances and risks involved in different project types. All of which works to your benefit. In the event that an error occurs, reputable estimators will have professional indemnity insurance to protect you from any financial fallout.
The authority of an independent third party
As we’ve already mentioned, clients often push back on cost estimates, especially when they’ve been compiled by a contractor. By outsourcing your estimating to an independent, third-party, clients will be less inclined to question your cost estimates. What’s more, by citing your estimator on all matters of cost, you can protect your good relationship with your clients as well as your bottom line.
For more than 10 years, our team at Multiproject has been generating reliable, accurate estimates for countless projects, both big and small, commercial and residential, helping ensure they complete on time and on budget.
Our estimating service follows a straightforward 4-step process: project appraisal, initial review, estimate and completion. You get complete transparency throughout so you can submit your estimates to clients with confidence. To find out more about how we can make estimating easy for you, get in touch.