Before estimators can place bids or start on projects, they must know the types and quantities or materials necessary for completion. That way, they can ensure that the correct estimation of material costs and requirements occur.
This data also indicates labor costs. Under most circumstances, takeoffs are organized on a cost estimating spreadsheet. We’re going to talk about how to ditch your construction cost estimating spreadsheet and embrace new tools.
With up to 90% of all Excel spreadsheets containing errors, can construction companies afford to use them? These inaccuracies not only lead to problems on the job site but also profit losses.
Using a cost estimating spreadsheet lays the groundwork for your estimate. However, if these takeoffs are incorrect or incomplete, that will throw off your entire estimate.
The importance of accurate takeoffs:
If costs are overestimated during a construction takeoff, the owner may end up paying more than they should or decide to cancel the project. Contractors may experience other negative consequences, including losing bids to competitors.
When you underestimate a takeoff, you’re neglecting to take into consideration the unforeseen expenses occurring during various construction phases. These costs may affect the contractor, the owner, or both depending on the structure of the contract.
Supplies and building materials are more challenging to estimate than they initially seem due to fluctuating market prices.
Even though suppliers send out newsletters and price sheets updating their costs for supplies and materials, it’s time-consuming to update spreadsheets manually containing this information. Contractors would spend hours entering supplies and material costs into spreadsheets, as well as dates. Then, as new information came in, they would make updates.
During the cost-estimation process, it's beneficial to establish relationships with building suppliers and manufacturers. That way, you can lock in the right pricing as you put your estimate together. These professionals will also advise you on the best materials for your project.
When you're locking in prices with your suppliers, don't forget to ensure you're providing them with quantities. In doing so, you ensure they can fulfill and deliver your order on schedule. Delays often hurt the contractor's bottom line.
How cost estimating software and a construction cost estimating spreadsheet helps:
No one is perfect, and human errors occur in business documents. Estimators and general contractors are no exception. Therefore, it's critical to set up a system for reviewing all estimates for accuracy.
What happens if an estimator leaves out scope items or puts in inaccurate measurements? What happens if they're using the wrong unit of measure? Each of these instances is disastrous for the project. Therefore, in addition to estimators carefully reviewing their work, another member of their team should be reviewing it, too.
That way, more than one person is checking for inaccuracies, correct measurements, and that the math is accurate for every cost. You must also ensure your cost estimating team has enough time to put bids and estimates together, and then review them. Otherwise, mistakes will continue to occur. The goal is to ensure estimates are right the first time.
How data-driven reporting helps:
It's never a good idea to speculate when creating your bids by making uneducated guesses during the cost estimating process. You must track costs during every project to ensure every estimate, as well as bid, is as incredibly accurate. Cost estimating software can help ensure the accuracy of your bid.
Use the most accurate data you can find to determine the job costs for equipment, labor, and materials. Don't forget to factor in overhead costs, as well as the often neglected soft costs, including inspectors and permitting. You must also ensure you have the equipment and crew available when the project starts. You'll find your profits dwindling quickly or wiped out entirely if you have to rent extra equipment or additional subcontract work.
Because manually entering data into a spreadsheet may cause costly errors, it’s time to look at the benefits of a construction cost estimating spreadsheet. That way, your takeoffs, ordering, management, and reporting is more accurate. ProEst is a proactive approach to helping improve construction cost estimation accuracy so that your business can flourish with an increase in profit.
ProEst is a cloud-based pre-construction estimating platform that helps you create accurate estimates and digital takeoffs directly from blueprints quickly, allowing you to determine the most favorable rates for your company within the estimation process. There’s no guesswork involved. ProEst makes quality assurance in commercial construction projects estimation effortless. You won’t have to engage your entire team to be sure your numbers are accurate.
If you would like to learn more about how your commercial construction company can increase its profits and reduce miscalculations during the estimation process, reach out today and schedule a 1-on-1 walkthrough with one of our specialists today!