When it comes to justifying the cost of paying someone to estimate a job in your construction company, it’s important to recognize that accurate and thorough estimates play a crucial role in the success and profitability of your business. While the cost of estimating may not have a direct payback in the traditional sense, it indirectly impacts your bottom line by minimizing risks, maximizing efficiency, and enhancing your company’s reputation. Here are some key points to consider when building the cost of estimating into your job costs:

Minimizing Risks

Estimating a construction project involves assessing various factors such as materials, labor, equipment, permits, subcontractors, and potential risks. A professional estimator with experience and expertise can help identify and evaluate these risks, allowing you to allocate resources more effectively. By investing in accurate estimating, you reduce the chances of overestimating costs and not being awarded the contract, underestimating costs while winning the contract but losing money on the job, encountering unforeseen expenses, and facing financial setbacks during the project.


Maximizing Efficiency

A well-prepared estimate provides a roadmap for executing the project efficiently. Estimators consider the project scope, timelines, and sequencing of tasks, enabling you to allocate resources optimally. This results in better planning, improved scheduling, and streamlined workflows. Accurate estimates also help you identify potential bottlenecks or areas where you can enhance productivity, ultimately saving time and money.

Enhancing Competitive Advantage

Providing accurate estimates demonstrates professionalism and reliability, which can differentiate your construction company from competitors. Clients appreciate transparency and confidence in project costs, and accurate estimates contribute to building trust and credibility. By consistently delivering projects within the estimated budget, you enhance your reputation and increase the likelihood of repeat business and referrals.

Cost Recovery

While it may seem like the cost of estimating doesn’t have a direct payback, it’s important to incorporate it into the overall project costs. Rather than considering it as a separate expense, build it into the overhead costs of each project. By distributing the estimating cost across multiple projects, you can recover the expenses and ensure that they are appropriately accounted for in the project’s pricing structure.

Value Engineering

A professional estimator can provide valuable insights during the estimating process, suggesting alternative construction methods, materials, or design changes that can potentially reduce costs without compromising quality. This value engineering approach can help you optimize project budgets and increase profitability. It is essential to recognize that the cost of estimating is an investment in identifying these cost-saving opportunities.

Learning and Improvement

Estimating is not a one-time activity but an iterative process. Over time, your estimators will accumulate valuable data and knowledge about project costs, productivity rates, and industry trends. This data can be used to refine future estimates, identify areas for improvement, and enhance overall project management. By investing in estimating as a continuous learning process, you can achieve greater accuracy and efficiency over time.

Technology and Tools

Estimating software and tools have evolved significantly, offering features such as digitized takeoffs, database integration, and real-time cost tracking. While these tools may have upfront costs, they can significantly improve estimating accuracy and efficiency, ultimately saving time and money. Incorporating these technology costs into the overall estimation process ensures that the benefits they provide are factored into the project costs.

In conclusion

The cost of paying someone to estimate a job in your construction company may not have a direct payback, but it is an investment that indirectly impacts your profitability. Accurate estimating minimizes risks, maximizes efficiency, enhances your competitive advantage, and contributes to cost recovery. By incorporating the cost of estimating into your project costs, valuing it as an integral part of your business, and leveraging technology and expertise, you can ensure that your construction projects are financially sound and successful in the long run.

Tom is a construction estimator with over 35 years of experience in the industry from field work to general contracting.

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