Creating accurate estimates for construction projects is an essential part of running a successful construction business. Without knowing the cost of a project before taking it on, you could end up either undercharging for the job or taking on too much work.
Creating a construction estimate can be an intimidating task, even for experienced professionals. But it doesn’t have to be.
CountBricks.com can help you create an accurate estimate to maximize your profits with our AI construction and trade estimating, takeoff, invoicing, and change order software for web and mobile.
In this article, we’ll detail the 6 steps you can take to create an accurate construction estimate with CountBricks.com.
Estimating a construction project accurately and on-time is essential for success. That's why it's important to begin your project with a pre-check to know the scope of the job and make sure you have all the necessary information to create a precise and profitable estimate.
Ask the Right Questions
Make the most of your client conversations and ask the right questions upfront. This will ensure you have all the details you need to create an accurate and timely estimate. Not only will this save you and your client time and money, but it will also help you build a positive and trusting relationship.
Here are some questions to ask your clients before you submit an estimate:
-What’s the timeline for this project?
-What’s the budget?
-What’s the vision for the final project?
-Are there any changes to the existing building?
-Are other professionals or subcontractors being hired?
-What are the client’s concerns?
Inspecting the site in person is a must before submitting an estimate or bid. There may be onsite factors that affect the final bottom line, and you need to consider these when creating your estimate.
Check the accessibility of the site and decide if you need additional equipment to help you get the job done. Assess the condition of the site, and determine if you need to remove any existing structures or acquire any special materials or equipment to build on the landscape.
Knowing the answers to these questions will help you make a more accurate estimate and save time and money down the line.
When you’ve done your due diligence with your construction site pre-check, the next step is to put together a comprehensive assessment. Gathering all the data you’ve collected in one place will make creating your estimate a much smoother process. Here are a few details to add to your assessment:
-Materials and labor needed to complete different phases of the job
-Notes from your inspection
-Concerns or potential issues that must be handled
-Environmental components to be aware of (i.e., soil quality, local conservation areas, hilly terrain)
-Accurate measurements of the site
-Pictures of the site
-Any relevant architectural plans or drawings
Construction materials form the basis of many construction projects, so it's important to accurately calculate and budget for the cost of supplies. CountBricks.com provides AI construction and trade estimation, takeoff, invoicing, and change order software that helps make this process simpler and more efficient.
When you're estimating construction material costs, it's important to consider the unit of sale for the materials (e.g., cubic feet, sheets, bundles), the amount of square footage each unit covers, and the price per unit. With CountBricks.com, you can quickly and easily access and compare these prices from various suppliers in the quantity you require. Whether you've already established relationships with suppliers or are just shopping around for the best offer, you'll be able to accurately estimate the total material costs for your project.
Change orders and unexpected expenses can also complicate the material budgeting process. With CountBricks.com, you can easily manage these additions and adjustments with our cloud-based software, making sure materials are always accounted for.
When it comes to estimating for a construction job, the last steps are accounting for CountBricks' overhead and profit margin expenses.
Calculating Overhead Costs
The first step is to determine the hourly overhead costs. To do this, divide the yearly overhead costs by the number of billable hours you're expecting to have in a year. This is especially important for businesses that are affected by the seasons.
Once you have the hourly overhead cost, you can use this to calculate the overhead costs for an individual job. The formula for this is simple: Hourly Overhead Cost x # the Hours to Complete the Job = Overhead Cost for the Job.
For example, if a job will take three and a half hours to complete, the total overhead cost would be $678.34.
Items to Consider
In order to account for overhead, there are some items you'll need to consider. These include business equipment such as computers and phones, rent and utilities, salaries, permits and licenses, vehicles and fuel, taxes and business insurance, as well as advertising and marketing.
Having an accurate measure of your construction business' profit margin can be invaluable for ensuring that you remain profitable and competitive in your industry. To calculate your existing profit margin, start by calculating your net profits using the following equation: Total Revenue – Material Costs – Labor Costs – Overhead Costs = Net Income. You can then determine your profit margin by dividing your net income by your Total Revenue.
To include your profit margin on the cost of materials for a particular job, use the following equation: Total Project Material Costs* + (Total Project Material Costs* x Profit Margin) = Total Project Pricing.*Total project material costs include labor.
Ideally, a construction business should maintain at least a 15% profit margin; however, depending on the contractor's specialty, the ideal percentage could be as high as 50%. In the first three quarters of 2023, the average gross profit margin for construction services has ranged from roughly 20%-30%.
Using CountBricks.com, contractors can easily calculate their construction profit margin, track project costs, and stay efficient and competitive in the construction industry.
Creating a precise and all-inclusive construction estimate can be a difficult task - from outlining the project scope, listing materials, estimating labor costs, and more. To make sure your construction estimate has all the relevant information for your client, CountBricks helps you check every item off your list with ease.
When putting together an estimate for a constructions job, it is essential to include:
-An exhaustive project scope, outlining all the efforts taken from prep to cleanup
-A comprehensive list of materials necessary
-A breakdown of material, labor, and other costs, as well as your profit margin
-The overall job cost
-Details of payment terms and due dates
-An expiration date
-Contact information of your company
Save time and stress by creating a construction estimate template with CountBricks. With our AI construction and trade estimating software, templates are easy to make and customize according to your specific projects. Take advantage of CountBricks to make creating and delivering your estimates as effortless as possible.
As a user of CountBricks.com's AI construction and trade estimating, takeoff, invoicing, and change order software for web and mobile, you have the ability to quickly and accurately create construction estimates for your clients. Now, it's time to deliver that estimate so that your clients can make an informed decision.
When emailing your estimate to a client, make sure you include:
- A straightforward subject line that accurately reflects the email's content
- Personalization in the body of the email to address the client and reiterate the details of the job
- Clear instructions regarding how to view the estimate and access the quote
- A list of the next steps they should take to move forward with your services
- A closing thank you and contact information
By following these guidelines, you’ll make sure your clients have the information they need to evaluate your quote and decide whether to move forward with your services. CountBricks.com provides all the tools you need to make deliver your estimates quickly and accurately.
