How to Explain Construction Estimating

Construction estimating may sound like it is straight forward but there are so many nuances in it that non-estimators may struggle with understanding what estimating is. A rudimentary definition is construction estimating is determining how much a project will be to build. If it were that simple, then everyone would be able to do it well. Here are 10 ways to help you explain estimating to a non-estimator.

  1. The first step of planning a project.

Planning is a huge part of the construction industry. Planning saves time and money while also keeping safety requirements top of mind. Estimators live in the planning phase of projects. They look at each revision of drawings and models to determine the cost, limit future change orders, and point out red flags for the entire project team.

  1. Quantity wizards thrive here.

Nothing gets built without estimating being involved. Imagine building a shopping mall without first determining how much the site prep work would be or the cost of concrete. That’s walking blindly into a multi-million-dollar mistake. Estimating involves creating a quantity list of supplies needed for the project and associating the price and fees for each.

  1. Accountable beyond the estimate.

Estimating’s accountability doesn’t stop once the project has been awarded. When a project’s actuals (what it actually cost to build the project) get tallied up, construction firms want to be on the money (pun intended) with their estimate. Being able to learn from variances in the estimate and actuals helps construction companies look for triggering events in the planning of future projects.

  1. Lives in margins of errors.

As people work on estimates, the goal is to get as close to perfect on the price without going over. Or at least within a reasonable margin. If a mechanic told you your car needed $1,000 worth of work before he started and then charged you $1,300 once it was done, you would probably be upset. And you most likely wouldn’t trust that mechanic going forward. That’s the same mentality with estimating. Give project owners as much information upfront while considering their project wish list and associating cost with all of it. The closer estimating is to the agreed-upon amount, the more likely the project owner will be a repeat customer because they trust the estimating process.

  1. Organized chaos.

There is a huge amount of activity that happens in estimating every day. The vast majority of construction companies are estimating multiple projects at one time and each project comes with its own meetings, sub-contractors, drawings, takeoffs, reports, conference calls, etc. Estimating is adrenaline-packed because of deadlines and big expectations for winning the next project. Thankfully, those in an estimating role are highly organized and efficient.

  1. Watches for trends.

Noticing trends in the supply chain, cost of goods fluctuating, crew rate increases and many more variables is a big part of estimating. When a construction company can prepare and act upon trends in the marketplace then they can improve their margins, create some surety in the prices, and make sure they are keeping project owners’ best interests at heart. Again, being that trusted resource for project owners when it comes to trends is a huge value-add from estimators.

  1. Builds trust early.

As mentioned, trust is paramount in construction, and keeping it is key to being a successful company. Estimating plays a huge role in building trust early with project stakeholders. Cleary, if the project owner doesn’t trust a construction company’s estimating process then they can squash that project. They aren’t going to waste money and their time on someone they don’t have faith in. Additionally, there are so many other groups that need to have a trusting relationship in a project. Sub-contractors are a major piece of any capital project and if there isn’t mutual trust in the early planning stages then it sets the project up for setbacks even before ground is broken.

  1. The work doesn’t stop.

Within one construction project, there are multiple revisions of an estimate. As new iterations of designs get delivered, project schedules get updated, and scope changes are explored there are continuous edits. Estimating is not a linear process. Sometimes it is a circle back and check on the quantities, double-check the sub-contractor fees, or include a new portion of the project that wasn’t designed yet. There is a multitude of scenarios that causes an estimate to be continuously worked.

  1. Accuracy and timeliness are must-haves.

Having accurate numbers is a requirement for winning a project and building trust. Combining this accuracy with the timeliness to get project stakeholders' answers is a nuanced area of estimating. Needing very specific cost and quantity details quickly to make project decisions is how successful construction firms leave a great lasting impression on project stakeholders.

  1. The first impression of a company’s expertise.

Since estimating is during the planning stage of a project it is also the first impression of the construction company to project stakeholders. Estimating can help set the tone for the company’s collaboration and innovation. If a construction firm struggles with communicating quickly on why the estimate jumped in price, it starts to embed doubt that they’ll be able to quickly respond during the actual building process. On the flip side, if estimating can demonstrate the company’s commitment to using modern technology, sets routine collaboration meetings, and document a communication structure during the planning process then it gives confidence to project stakeholders they are teamed up with the right people.

Related Posts

What is Lean Estimating? Estimating isn’t always just “estimating.” Of course, there’s your everyday cost estimating, which is what most of us mean when we use the term …
Read more
Standardization: How are Software Vendors Making It Easier to Speak One Language? Companies that use multiple estimating tools can make their estimators’ lives easier by streamlining their processes. The fastest way to do this is …
Read more
The Future of Model-Based Estimating It wasn’t even a year ago we were advocating for industry-wide standardization of model-based estimating—a concept, even then, that was fresh in the …
Read more