Construction costs are increasing each year, averaging at 3.5% to 5.5% from 2012 to 2019. Costs for materials are also increasing at a rate of 4% to 6%.

These are only some of the factors you must take into account when making estimates. Consider direct costs, indirect costs, risks, and so much more. Otherwise, you end up going over or under the budget.

How can you create more accurate estimates? In this guide, we discuss some of the best estimating tips around. Read on and find out more:

1. Break Your Tasks Into Manageable Chunks

Tasks are much easier to handle when broken into smaller chunks. The same applies to project estimates. It’s easier to put a price on smaller tasks than one overwhelming project.

Instead of guesstimating with uncertainty, break the project into quantifiable tasks. This way, you can also have others weigh in on the project. Don’t hesitate to ask your other team members for an estimate of their specialized tasks.

However, stop breaking the tasks down at a certain point. Having hundreds of small, minute tasks is hard to handle since it makes too much administrative work. It might slow down the project’s pacing and make things more confusing.

2. Work With the Other Project Members

Who can better estimate the number of hours and materials it takes to get work done? Your workers.

As mentioned above, it’s a great idea to work with other project members when estimating a project’s worth. Each member of the team knows best about their specialty. It means they’re in a better position for estimating tasks.

They can give estimating help and some useful inputs, as well. They may suggest easier ways to do a task, for example. They know better about the materials, hours, and risks associated with each task, making it easier to create more accurate estimates.

Doing so helps your team members understand how the processes work. While discussing specifics, you might even discover potential shortcuts to make the whole project cheaper.

It also gives them more breathing room. With that, they can bring their best to the project. When unrealistic estimates promised to the client aren’t holding them back, they don’t have to cut corners.

3. Gather as Much Information as Possible

To gain a better understanding of the work, gather as much information as possible. Your estimate is only as good as your knowledge of the project.

You or the lead estimator should talk to the client to ask about specific details. What’s the scope of work? What materials do they prefer?

Explain that you need as much information as possible to give your customers more accurate quotes. Sometimes, they’re not that knowledgeable about their desired outcome.

In this case, you can give them different rough quotes and explain the differences. It will give them a better idea of what they want and what fits their budget.

4. Refer to Previous Projects

Always refer to past similar projects to get a better idea of the current project. How did your estimate of the previous one turn out? Did you go over budget or did you have to cut several corners to keep it close to your estimate?

Take these into account as you might make the same mistake again. Review what went wrong, what went right, some unforeseen costs, and so on.

However, avoid basing your estimate on the previous projects. It’s likely for the pricing to change because of market fluctuations. The materials or cost of manpower might be more expensive now.

It’s also a good tip for when you’re working on a project with few details. Make estimates with little information through historical data.

5. Consider the R&D Time

Some projects require you or your team members to learn a new skill, buy new equipment, or spend more time doing research. You also have to take into account the time spent on these activities on top of doing actual construction work.

It’s especially important when you’re a young company. You may not have to bill the entire expenses to the client, but add them to the total time estimate.

6. Use the PERT Method

One of the best estimating techniques you can learn is PERT. It stands for Program Evaluation and Review Technique. It’s a method that many industries use for their estimates.

This technique reviews all risks associated with the project. In the end, you’ll come up with three values: pessimistic, best guess, and optimistic.

For instance, your best guess for a specific project is one week. If everything goes well, it can only take five days, making it optimistic. If the client asks for several changes and some materials arrive late, it may take up to 12 days.

Once you have these figures, get your true estimate from their average. In our example above, a good estimate that factors in the risks is 8 days.

Feel free to use other methods if they suit you better. You can also get help from the best estimating software for construction.

7. Update Your Estimates

As you go through the project, don’t hesitate to update your estimates whenever necessary. The more work you do, the more insight you gain. You get a more certain picture of the expected outcome, which means updating the estimate.

Make a habit of revisiting your estimates for each phase. Make it a collaborative effort with your team members. Don’t forget to consider your clients’ requests when updating the price.

Get Better at Creating More Accurate Estimates Soon!

Estimating becomes easier over time as you work through several projects and get a better idea of the industry. Regardless, it’s not a bad idea to get help from as many sources as you can.

You have to keep learning to give more accurate estimates.

Do you want more topics that cover the construction industry? Read our other posts for more valuable tips today.