Introduction: Construction Estimate: How to Estimate a Project

Hey there!

In this Instructables, we want to teach you the basics of doing a construction estimate.

PLUS.... The basics in this post will apply whether you're looking to build a home construction estimate, a building construction estimate, road estimate, or pretty much anything else. Follow along and create your own construction estimate form, or just learn basic calculations and what factors to include for your estimates.

This Instructables is based off of a free video course published on Construct-Ed, online learning for trades Pros, by trades Pros.

Step 1: Understand What Estimators Actually Do

Everyone at one point or another has seen a construction or remodeling project taking place. Many have been involved in construction or remodeling type projects, even if it was when we were younger and being forced to help Mom or Dad paint a room.

Well, when a contractor is asked to give a quote or an estimate for a project, they need to be able to determine the cost to complete that work. And once they develop a price for completing that work, they have to be able to put their profit and overhead on the costs for the job in order to present that proposal to the homeowner or business owner. Construction estimators develop cost estimates as part of the job quoting and proposal process.

Step 2: Perform a Takeoff. (Determine the "quantities" of Your Estimate).

The next step for you to take is to determine "quantities" of what you're measuring.

For example, if you were going to estimate something basic, like a residential lawn for commercial lawn care, you'd want to determine:

1- What things you need to measure

2- What the exact numbers (=quantities) are of that thing you are measuring.

So in that example, you'd want to measure at least the size of the yard (sq. ft.).

*Note: what you need to measure and get quantities for is going to depend on what time of estimating you're doing.
For example, if you were to estimate inground pool installation, that would be very different from taking an estimate for remodeling a kitchen, which would be different from snowplow estimating.

So exactly how you estimate is going to depend on what trade you're in, and the exact job you need to take measurements for. It's up to you then to learn which things need to be measured for the exact trade you're in, or the exact job you're bidding.

But basically, most project estimates start by completing a "take-off". Take-offs can be done in multiple ways, but typically there are two main types of take-offs.

1) An estimator can visit an actual site and complete the site take-off.

2) Or they can complete a take-off by analyzing construction plans.

This type of take-off is done in the office and normally is completed using online digital plans or printed plans.

Definition – Performing a take-off is the process of taking off the information through site visits and/or plan analysis to determine quantities on the project site.

There are four basic mathematical calculations needed to complete most project take-offs:

There are many other types of calculations that are used in specialty applications. The four that we will look at here are at the core of what construction estimators typically do on a daily basis.

These calculations are:

Step 3: Price It Out.

After performing the takeoff, or getting an estimate and gathering all the quantities you need for the work to be performed, the next step is to put a cost to those numbers.

For example:

You're bidding commercial snowplow jobs, or commercial landscaping jobs, and you took measurements on sq. ft. of the yard or parking lot, how many snow events you anticipate a year, sidewalk area and how much salt would be needed, etc.

Now it's time to enter that info into some sort of pricing structure. That could be an estimating program, a spreadsheet you created, or just a pencil and paper.

Basically what matters is that you are able to assign a price to all or any of the following:

  • The materials you plan to use
  • The size or area of the project
  • The labor required
  • etc.

Typically estimates are broken down between different aspects of the project including labor, materials, subcontractors, equipment and other direct expenses. Direct Expenses definition – direct expenses as related to construction projects are those expenses that are directly related to the completion of that project. Example – labor is a direct expense. Office supplies are an overhead item and are not expensed to that job so they typically are not included in the estimate.

There are many different programs available to contractors and remodelers. Some contractors still use the pencil and paper method. Many contractors have developed proprietary programs that are unique to the way they do business. Also, there are pre-packaged programs that can be bought and implemented straight off the shelf.

Here's a great video made by a pro where he teaches you how to use Excel to create your own estimating template.

If you are a construction company employee and are looking to get into estimating, it is recommended that you speak with your company and look into training on their programs if they are offered. If you own your own company, it is highly recommended that you develop an estimating system that matches the way you do business and also can be taught to others as you grow and expand. After you have entered the quantities into the program, you manipulate the estimate to determine the project totals.

Step 4: Strive to Become a BETTER Estimator.

It may sound like a marketing tag line, but it is true - all good projects start out with a good estimate. An estimate is how a project’s costs are projected - and that estimate becomes the budget that the project is managed by.

If the estimate is in error, the project has impacted - and not in a good way. In order to have a good project, a company needs a good estimate. And in order to have a good estimate, a company needs good estimators.

So - if you are an estimator building a construction estimate - how are you building your skills?

Take the time to build yourself and your abilities. Growing your own abilities leads to success in your professional pursuits. If you are a company owner - take the time to develop your own leadership abilities and the abilities of your estimating team. Challenge them to grow and develop - and not to be tempted to just be content with the status quo. Growth requires movement.

That's why we created Construct-Ed: to be online learning for pros, published by pros, so you could learn from real experts in your trade who have gone before you and been successful. Growth requires pursuit and tenacity and an interest in learning.

And ultimately it requires individuals to share their skills and knowledge with others in order to create the hand-off. John Maxwell is famous for saying - Be a River, not a Reservoir. Don’t damn up your knowledge and hoard it. Share it freely so that you can elevate the team around you. When you elevate them, you in turn elevate yourself.

So ask yourself:

  • Are you being intentional in your position? Are you learning all that you can so that you are growing?
  • Do you understand who you are and what your strengths are? Are you honest with yourself and with those around you about your strengths?
  • Do you believe in your abilities and your skills as an estimator? If you don’t believe that you can be good at your job, chances are that you won’t be.
  • Have you taken the time to reflect on your successes? Are you learning from your mistakes - so that you can avoid them? Suggestion - look at job costing reports.
  • Do you commit consistent effort to your position? Do you continue to expect more and more from your estimates - or are you content with making mistakes?
  • Are you employed in an environment that supports your growth as an estimator? If you are the employer, are you creating an environment that encourages growth and development of your estimating team?
  • A detail is missed. A number is fat fingered. Do you accept responsibility and learn from it - or do you deny it or avoid it and transfer responsibility to someone else?
  • Are you continuing to allow your character to grow and support your growth?

Want more education from real Pros in the industry?

Click here to visit us and learn more.