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Construction Cost Estimating Best Practices for Success

“Give us the tools, and we will finish the job.” —Winston Churchill

Estimating is a critical part of the commercial construction business space. To build the clientele needed to scale, companies need their estimates to be as accurate as possible.

Rachel Burger at Capterra says in her “Ultimate Guide to Construction Cost Estimating” that your best estimates depend on the following:

  • Efficient, accurate processes and tools
  • The construction project for which the cost estimate is to be made
  • Your cost estimating experience and judgment

To wit, if you’re not using the right tool, all the rest of your knowledge and experience is compromised. Burger’s construction cost estimating trifecta is money, accuracy, and speed: “To meet all three criteria simultaneously, you might need a small army of estimators — or a suitable tool, such as construction estimating software.”

All Tools Are Not Created Equal

“A good tool improves the way you work. A great tool improves the way you think.” —Jeff Duntemann

You are likely aware of the benefits of using digital construction cost estimating tools over paper-based systems. Digital tools have increased accuracy, decreased production time, lower requirements for expertise, and integration into construction cost estimating software. But if you stop there, you are sub-optimizing—leaving money on the table at best or risking your business at worst. For all their usefulness, digital spreadsheets have documented risks that have contributed to costly construction errors. (For more on this, read “The Top 5 Risks of Construction Estimating Using Excel.”)

What’s better than a digital spreadsheet? An integrated, specialized, cloud-based solution!

A Tool to Put Everyone on the Same Page (in the Cloud)

You’re in the construction cost estimating business, not the Excel spreadsheet customization, double-checking data entry, and integration business. If you want to win more bids, you have to produce more estimates, and to do this, you need to:

  • Use proven software that’s developed specifically for cost estimating.
  • Take control of your takeoffs.
  • Centralize and integrate your data.

ProEst is a cloud-based pre-construction estimating platform that helps you quickly create accurate estimates and digital takeoffs directly from blueprints, 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 project estimation effortless. You won’t have to engage your entire team to be sure your numbers are accurate.

Use the Correct Tool Correctly

Even an ideal tool can be used incorrectly. It is easy to neglect construction cost estimating best practices when we bury ourselves in the daily details of construction management, especially as we respond to world-changing crises like COVID-19. But as Martin Luther King Jr. said: “The time is always right to do what is right.” Here is a brief refresher course:

Build a robust estimating system. This will help you improve your profit margin and learn your strengths and weaknesses as a company. Start with a complete scope of work. In addition to fixed costs like insurance, taxes, and accounting/bookkeeping, you should also include time frames and required tasks.

Use project history to benefit your business. Analyze your previous projects. How efficient was the work? Use what you learn to guide your future bids and estimates. ProEst is designed to help you in this process, offering reports and instant access to past estimates, project budgets, and bid sheets.

Choose which projects to bid on. Again, a thorough review of your project data will help ensure future success, but spotting trends within project categories can be difficult in a digital spreadsheet and nearly impossible using manual methods. ProEst’s reporting capabilities will let you analyze which types of jobs are most profitable for your commercial construction company.

Refine project costs and processes. With ProEst’s built-in general contractor database, you can set your estimating database up in CSI 48 division format. Unlimited sort types allow you to drill down into the details of your work and discover certain aspects of your workflow that haven’t changed for a long time but are a quick fix.

Additionally, ProEst allows you to clearly see which customers are your most profitable and set a bidding accuracy goal. You can review labor, material, equipment, and subcontracting costs and make any changes necessary to achieve a high rate of bidding accuracy, and it’s fully integrated with the RSMeans database and ProCore.

For a deep dive into construction cost estimating best practices, the US Government Accountability Office (GAO) recently released an update to its “COST ESTIMATING AND ASSESSMENT GUIDE: Best Practices for Developing and Managing Program Costs,” first published in 2009. According to the GAO, “It includes improved descriptions of cost estimating steps, additional technical information, and an updated format.” You can download the full report (476 pages) in PDF format.

Conclusion

ProEst believes that for commercial construction companies to grow, you need the right tools and processes in place. Without the right tools, errors can cost companies millions of dollars.

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!

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