Construction Project Management Services and Construction Books
  • Construction Home
  • About Paul Netscher
  • +Construction Books
    • Successful Construction Project Management
    • Building a Successful Construction Company
    • Construction Claims
    • Construction Project Management: Tips and Insights
    • Construction Management: From Project Concept to Completion
    • An Introduction to Building and Renovating Houses
    • The Successful Construction Supervisor and Foreman
    • Designing your ideal home
  • Construction Management Services
  • Book Reviews
  • Contact
  • Blog | Construction Management
  • Site Map
  • Blog | Home Improvement
  • Index of construction articles
  • Useful Links
  • Index Home Improvement

Common Construction Estimating and Pricing Mistakes

26/3/2020

2 Comments

 
Picture
PictureImage courtesy of stockimages at FreeDigitalPhotos.net
When you are in the construction industry, estimating project costs is an inevitable task. Surprisingly, estimating is actually one of the most difficult tasks when it comes to a construction project. If your price is and cost estimates is too low your project will lose money. If your prices are too high your competitors will have lower prices and will win the project. 

The profitability of a project at the time of completion can vary from expectations at the beginning of the project. This is why a construction company must get their price estimates right before the project starts. One factor that is really important in determining the profitability of a project is estimating. Profits are typically won or lost based on the accuracy of your estimates and how they match with your final project costs. Some companies shut down because of unprofitable projects. Believe it or not, chances are that one bad estimate of a project won’t easily put you out of the market, but try two to three bad estimates and your company will probably fail.

Let’s take a look at some common construction estimating mistakes and how you will be able to prevent them. 
​

1. No Site Visit 
There are no two identical job sites and there are sometimes unknown site conditions that can cause unexpected and even costly issues when the construction work begins. This is why before pricing a construction project you should conduct a site visit. A site visit enables you take measurements, inspect the topography, look at road access and traffic to the site, determine how much space you need for staging, equipment, and the delivery and storage of materials. It will also help you know what environmental protections should be in place for construction so you can allow for these and other costs.

You also have to ensure that any subcontractors whose work may be impacted by the site condition visit as well. This is important so they can assess the site for themselves and factor in all the additional costs that the existing site conditions might present when you’re already doing the estimates.

2. Inaccuracy of Takeoffs (measurement of quantities)
Takeoffs help lay the groundwork for estimates. When you have incorrect or incomplete measurement of the quantities your price estimates will be wrong. To help you determine the exact quantities needed for all your materials and supplies, you need to have accurate takeoffs. Takeoffs are also important to determine your labour and equipment needs. Missing items during takeoff, or having the wrong quantity, will result in a cost estimate that is wrong, either too high or too low. 

To get accurate measurements for your estimates, you can now use takeoff software. 

3. Labour Costs
Labour costs are sometimes the hardest item to nail down accurately when it comes to making your estimate. When it comes to labour costs., there are several variables that come into play. This can include the number of available workers for the project, their experience level, their productivity, and the rate of pay. You should focus on the determination of the number of man-hours it takes to perform a task to use a guide in the estimation of labour costs. Also, don’t forget to keep records of past job costs, especially labour costs and production rates, to help you get more accurate estimates on future projects. 

4. Costs of Materials and Supplies 
Another big cost for construction projects an accurate estimate of your construction materials and supplies. Keep in mind that prices for materials can change from the time you start an estimate up to the time that construction commences. The demand for materials changes and this impacts the prices, thus making it harder to get estimates right. Currency variations also impact the cost of imported materials.

One thing that can help you with the costs of materials and supplies is by establishing relationships with building product manufacturers and suppliers. They will not only help you lock in on accurate prices but they can also refer you to alternative materials that might better fit your project. 

5. Failure to Assess Risks & Create Contingencies

Risks are always a possibility in every construction project. You should incorporate a risk assessment when you’re doing the estimating process. Failure to assess risks and build in contingencies to your estimate will be detrimental if things do go wrong. Always remember that you likely won’t be able to recover your losses should an unforeseen issue suddenly pop up once construction has commenced. 

6. Uneducated Guesses
This is something you must never do -- don’t gamble on a project by making uninformed or uneducated guesses in your estimate. To ensure your estimates are accurate, you should track job costs on every project. Research the most current data available and base your job costs for labour, materials, and equipment on this data. Also, include overhead costs and cost for inspections. 

7. Not Checking Your Work
Although small estimating errors or omissions might not make much of an impact, big ones such as omitting scope items, inaccurate measurement, or using wrong units of measure, can put your business in huge trouble. Always take the time to carefully review your work. Ensure that your measurements are accurate and that your math for all costs is correct. Keep in mind that rushing through your work will only result in costly mistakes in the future. 

8. Not Reviewing Contractor/Subcontractor Estimates
If you need to hire contractors and subcontractors, be sure that you review their bid estimates and proposals. They should understand exactly what aspects or parts of the project you want them to work on and complete on time. This is important to avoid duplication of work in their estimates that are covered by other contractors and subcontractors. 

Lastly, you should always be involved in every stage of the project estimate. You may hire an estimator if you think it will work better for your company. However, it is advisable that you always stay updated and involved. Review everything that your estimator reports to you and don’t hesitate to provide advice or make changes to their proposals. If you are not yet confident with your judgement, you can seek the help and advice of reliable construction companies that could be your possible contractors or subcontractors for a project.

Author Bio: Best Access Doors is a trusted supplier that provides for your access door needs or for any construction project. When it comes to helping construction companies come up with great estimates for their business, we do our best to give you affordable quality products. For more inquiries or more help, visit our website.

Do you want to learn how to manage construction projects successfully?

Picture
Click on picture to view books on Amazon
​Paul Netscher has written several easy to read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
​

The books are available in paper and ebook from most online stores including Amazon.
Find out how Paul Netscher can help you
construction management construction project management
2 Comments
Jack Morgan link
7/4/2020 05:33:32 pm

The points mentioned above are well portrayed. I have been into the construction business for a long time now. This blog is really informative and important to read to avoid major mistakes during the execution of any project.

Reply
jatinkh
21/8/2020 07:48:40 pm

very nice would be fortunate if you guide about my writing..
http://druviconstructionconsultants.com/

Reply



Leave a Reply.

    As an Amazon Associate I earn from qualifying purchases

    Archives

    January 2023
    October 2022
    August 2022
    June 2022
    May 2022
    March 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014

    Categories

    All

    RSS Feed

    Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
    The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
    "I have what I consider some of the best books on construction management."


    Books are available from:
    Amazon.com
    Amazon.co.uk
    takealot.com

    kalahari.com
    Amazon.in
    Amazon.de
    Amazon.fr
    Amazon.it
    Amazon.com.au
    Powell's
    Fishpond
    uread
    bokus
    Amazon.ca
    Amazon.es
    Other retail stores


    Available in paperback or on Kindle

    ​"28 YEARS OF CONSTRUCTION PROJECT MANAGEMENT EXPERIENCE, DEVELOPING SUCCESSFUL CONSTRUCTION PROJECT MANAGERS AND BUILDING SUCCESSFUL CONSTRUCTION COMPANIES"

Construction Books

Successful Construction Project management
Building a Successful Construction Company
Construction Claims: A Short Guide for Contractors
Construction Management: From Project Concept to Completion
Construction Project Management: Tips and Insights
​
Build and Renovate Your Home With Your Eyes Wide Open
Book Reviews

Construction services

Construction Management Services
Paul Netscher
Construction Management Blog
​Home Improvement Blog

Contact
Developing Successful Construction Project Managers.

Building Successful Construction Companies.
30 years of construction project management experience
  • Construction Home
  • About Paul Netscher
  • +Construction Books
    • Successful Construction Project Management
    • Building a Successful Construction Company
    • Construction Claims
    • Construction Project Management: Tips and Insights
    • Construction Management: From Project Concept to Completion
    • An Introduction to Building and Renovating Houses
    • The Successful Construction Supervisor and Foreman
    • Designing your ideal home
  • Construction Management Services
  • Book Reviews
  • Contact
  • Blog | Construction Management
  • Site Map
  • Blog | Home Improvement
  • Index of construction articles
  • Useful Links
  • Index Home Improvement