6 Estimating Mistakes That Cut Into Your Profits.

Estimation is possibly the most challenging job in construction. It is wise to get an accurate estimate before you begin a project.

Profits on a project are determined by how accurate your build estimate is and how well they match your final project cost. Many elements like – labour, material costs, worker productivity, risk factors, overhead costs – must be considered for a reliable construction estimate.

The construction industry has had to readapt due to the global pandemic. The supply chains have been affected resulting, in higher business costs. Running a profitable business in this economy is difficult, to say the least. It is crucial that you avoid estimating errors now more than ever to stay competitive and productive.

In the construction industry, where there is no space for costly errors, tightening up your estimating process seems to be the only way out.

To make your quotes as precise as possible, you will need to avoid these costly mistakes.

Do not Rush the process:

Your takeoff estimates are the foundation for your build estimate. You may become overwhelmed and leap to hasty conclusions when you’re dealing with many deadlines and countless back-to-back meetings. What you must note is that this is a potentially dangerous situation. When you are rush to accomplish take-off on a tight schedule, the possibility of missing something is higher.

Hasty decisions lead to inaccurate estimates, resulting in additional delays. It takes more effort to track down and repair errors than to spend extra time double-checking the computations.

Here are a few suggestions to relieve the stress while reducing the chance of a catastrophic omission:

  1. Do not randomly bounce from one section to another – Stick to a routine so you can check off everything.
  2. Use take-off software to automate and digitalise the procedure. It allows a more systematic approach, making it less likely that you’ll miss something. It makes the process faster and saves you time.
  3. Double-check everything, ideally with someone else looking over the take-off to make sure nothing is missed.
  4. Alternatively, you can outsource estimation to a reliable construction estimating service and take the burden of estimation off your shoulders.

Counting more than once:

If you miss something or count something twice – your costs won’t tally up, you’ll have the wrong materials, and your profits will likely suffer. Highlight the work as and when you complete and review it or better yet, take accurate notes as you go along. It will stop you from counting something twice or missing it out altogether.

Mandatory site visits:

No two project sites are alike. Unknown site characteristics generate unexpected issues and complications, which can be too costly to resolve. Technical drawings and blueprints can be confusing. You should pause to consider the site’s road access and traffic, as well as the amount of space available for staging equipment, material delivery and storage or any environmental safeguards that may be required during construction. Be sure to have as much information as possible regarding the location where you’ll be executing the job. The best way to get this information is by visiting the job site.

Relying too much on experience:

It is sometimes logical to draw on previous data and use it as a guide but, you should always be wary of how accurate this is. Every client is different and every project is unique, with its own set of challenges and opportunities. Draw from your previous experience, but also understand the needs and wants of the project at hand.

Correct forecast/Assess Risks:

Every building project entails some level of risk. Risk assessment should be a part of your estimating process. For starters, it aids in your bid/no-bid decision. It also assists in determining how much to budget for eventualities.

Without a proper risk assessment, you will likely miss out on an opportunity to safeguard your company from overruns and delays.

Wild Guesses:

Don’t take chances with your bids by estimating using ill-informed or uneducated estimations. Always use the most recent data available to calculate labour, materials, and equipment expenses. Do not overlook administrative expenditures and soft costs like permits and inspections.

Conclusion:

Accurate takeoff estimates help lay the groundwork for sound construction estimates. Effective time management and establishing a clear line of priorities so that the most difficult/important activities are completed first are good places to start. Standardise you’re estimating procedure to follow the best practices.

If you can figure out why your estimate didn’t land you the job or why you didn’t make as much money as you expected, you can apply what you learned in your next project and improve.

Alternatively, you can knock on our doors and let us help you with the important task of estimation. With over 50+ years of combined experience, Chase estimating can help you get accurate electrical, mechanical and thermal insulation estimations for your project. Our team of diligent, skilled and experienced estimators work round the clock to give you an accurate build estimate.

We have adopted best estimating practices and cutting-edge technology that enable us, to tackle any issues out there. Our dedicated team will analyse your project in detail and provide you with a sound mechanical, electrical and thermal insulation estimate that will give you a competitive edge and help you win more bids.

Get in touch with us today! Email us at enquiries@chaseestimating.com or call us at 01630417161. We will promptly get back to you.

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