Why details matter in cost estimating for construction
When it comes to construction cost estimating, the devil is in the detail. Any inaccuracies or missed details could put you at risk of claims for extra costs, eating into your budget and your profits. Ensuring that all details are covered and are built into your estimates will help to remove or at least minimise the risks of unforeseen costs disrupting your projecting.
Here, we’ll take a look at why you need to focus on the details in your estimates, no matter how insignificant they may seem at first.
No Two Projects Are The Same
One of the biggest reasons to ensure you factor in every detail when estimating is that no two construction projects are the same. It can be easy to generalise estimates based on previous experience, but this isn’t the best option.
While benchmarking based on the size of a project can give you an idea of the budget, there are a lot of other factors you need to take into account. Whether it’s a particular specification for the project, unusual structural and groundworks design, high finishes specification or site constraints, these details can all soon add up.
Failing to consider each project individually can result in underestimating the costs required to deliver the project and potentially result in a loss.
Under and Overestimation Can Cause Problem
Any inaccurate estimation can cause issues, whether you’ve underestimated or overestimated the cost of a project.
Overestimating can mean that you are less successful when it comes to tendering, with project owners choosing to go with a more reasonably and accurately priced bid. Estimates that are too high can also risk damaging your company’s reputation, especially if the difference between your tender and other firms’ is significant. You need to be competitive but also accurate.
In contrast, underestimating the costs of a project can mean reduced or no profits on the project, potentially putting the contractor in a dire financial situation. Firms have lost huge sums of money due to construction costs escalating far beyond their estimates.
Details Help You Manage Uncertainty
There is always a degree of uncertainty around the full final cost of a construction project and this is unlikely to change. Estimates by their very nature are never going to be 100% accurate but they can get close.
Drilling down into the details with your estimate can leave you in a better position to handle the inevitable uncertainty and budget for added expenses that are, in your experience, highly likely. This can leave you covered in the case of annual wage increases for long-term projects, fluctuating material costs and insurance to cover delays.
If done in moderation, you can remain as close to the actual cost as possible, while also retaining some protection against added costs.
A Construction Estimator Can Help
With accurate construction estimating being so important, each estimate can take a lot of time to complete. This can mean that you have less time to bid for and win projects, as well as manage other day-to-day activities.
A construction cost consultant can help free up your time and provide reliable, accurate estimates that help your projects stay on budget as well as on time.
Utilising estimating services in London can ensure all the required details are included and that all potential costs are covered. This can help with time and cost planning while also ensuring a project’s profitability.
Here at MultiProject, we deliver reliable and accurate cost estimates for any sized project. Every estimate is delivered in a timely manner, allowing you to spend more time on your other responsibilities. We also price in detail, with unknowns listed and managed to reduce the risk of additional cost claims. Our experience in the industry also means we can provide detailed insights in material and labour requirements, allowing for better project planning.
All of this helps ensure your estimates reflect the final cost of a project as closely as possible.