Estimation of construction costs is an activity of prime importance on which the entire construction work is based. Construction work involves transactions of huge amount and therefore, it is important that the estimate made is accurate. The estimate must be carried out accurately so that there are no delays that would hamper the work in any way. The general trend that is seen is that labor costs account for 40% of the construction costs. Thus, for work to be carried out properly and to be completed on time it is important that the correct estimate be made. Any shortfall in the cash position would involve huge losses for the contractor and also bringing about a time delay in the project.
Construction Cost Estimating – How to do a Professional Job
First and foremost the estimator should have a clear understanding of the structure that is to be constructed. Whether it is a home, business or some addition to an existing structure should be clearly laid down. A construction engineer would step in at this stage and after evaluating the plan and the requirements would draw an estimate. An accurate estimation of the construction cost is very important.
The next step involves making an estimate of the individual requirements. You must put down details as to the time required, the labor that would be required to complete the work, cost of material and equipment and the like. All the areas of expenditure should be taken into account and a detailed estimate of the costs involved for the individual works as well as the project as a whole must clearly be laid down.
The estimate is drawn so that both the contractor as well as the client have a clear idea of the various categories of cost and also the time required for completion. The estimate must be accurate. After the estimate is drawn the next stage would involve financing or funding the project. You would be able to identify the sources of finance and how much amount would be available from each source. The finance must be arranged for before starting off with the work. Any shortfall in funds at any stage would add to the overall cost of the project and also increase the time required for completion. A regular flow of cash to fund the different stages of the project is required for ensuring proper completion of the work as per the estimated time.
The different aspects related to construction estimation brings out the importance of the task for both the contractor as well as the client.
Nick Hurd is the developer of LiteningFast Estimating. LiteningFast is an estimating program that helps you estimate faster, easier and more accurately. It’s integrated with QuickBooks to provide job cost.
It was introduced to tbe market in 1994 and currently has over 3,500 users in the US, Canada, and around the world.
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