5 Construction Estimate Mistakes That Could Cost You Big
One of the most important jobs in the construction field is the estimating position, because it requires you to be thorough and accurate with cost appraisals. These figures are challenging to calculate because of the sheer number of variables involved.
Providing an estimate that is too high will make your bid less competitive, while valuing too low can affect your profits. Additionally, estimates affect everything from the number of concrete forms you need to purchase to the number of workers needed to complete the job.
It is absolutely essential that you plan ahead. Protect your bottom line by avoiding these five estimate mistakes that could cost you big.
You Didn’t Visit the Project Site
This may seem a bit obvious, but this step is commonly overlooked by contractors who assume that their project is going smoothly. No matter how by-the-book a project seems, it’s impossible to predict exactly how a job will go, especially if you never bother to visit the site.
On your site visit, pay attention to elements unique to the area. Note the site’s proximity to supply centers and check for any preexisting construction that will need to be removed.
You Failed to Prepare for Surprises
Even if you visit the site, surprises are bound to come up. Many construction issues aren’t visible until work has already started.
Your bid should include a section for unknown expenses, and it should be as specific as possible. Have estimated costs and timeline increases in place for things like unforeseen repairs and weather delays or damage.
You Didn’t Check Your Numbers
When you’re drafting up estimates, it is imperative that you make sure you have the correct rates, measurements, taxes, etc., before submitting your estimate. However, it’s easy to get a little too comfortable when you run the same kinds of numbers over and over for every estimate.
Just one small error can cost you big. Go over your math and measurements a couple of times and have someone else look them over as well, if possible.
You Underestimated Labor Costs
Labor is probably the most difficult cost to estimate. In addition to accounting for basic labor requirements, you need to include labor estimates for those little surprises we mentioned before. Even basic labor costs can be challenging when you have to account for variances in hourly rates and potential overtime.
Hourly rates can vary significantly depending on where in the country the project is taking place. On top of that, you’ll need to consider any fringe benefits for members of local union offices.
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