The burning question of how do I justify the cost of an estimating a job? How important is it? Can I trim a little off of my overhead costs and try to wing it? In the following article I will try and answer that question and many more of why estimating is important.

Here’s a comprehensive list of reasons why estimating is so important for competitive bidding, explained in short and simple sentences:

  1. Accurate Cost Prediction: Estimating helps you calculate project costs with precision, allowing you to provide competitive bids that reflect the actual expenses involved.
  2. Competitive Pricing: Accurate estimates enable you to set prices that are attractive to clients while ensuring your company remains profitable.
  3. Winning Projects: Competitive bids based on accurate estimates increase your chances of winning contracts, as clients are more likely to choose contractors who demonstrate transparency and reliability in their pricing.
  4. Client Trust: Providing transparent and well-detailed estimates builds trust with clients, showing your commitment to delivering what was promised without unexpected cost overruns.
  5. Effective Resource Allocation: Estimating guides you in allocating resources such as labor, materials, and equipment efficiently, reducing wastage and unnecessary expenses.
  6. Project Planning: Detailed estimates help you plan the project timeline and schedule, allowing you to allocate resources appropriately and meet deadlines.
  7. Risk Management: Thorough estimates consider potential risks and uncertainties, helping you plan for contingencies and minimizing the impact of unexpected events.
  8. Comparative Analysis: Accurate estimates enable you to compare different projects and choose those that align with your company’s strengths and capabilities.
  9. Building Relationships: Transparent and competitive bidding, supported by precise estimates, fosters positive relationships with clients and increases the likelihood of repeat business or referrals.
  10. Industry Reputation: Consistently delivering projects within the estimated budget enhances your reputation as a reliable and professional construction company.
  11. Cost Control: Detailed estimates help you monitor costs throughout the project, ensuring that expenditures stay within the projected budget.
  12. Profit Maximization: Effective estimating prevents underpricing, allowing you to maintain healthy profit margins on projects.
  13. Staying Ahead of Competitors: Accurate estimates set you apart from competitors who may provide vague or underestimated bids, showcasing your professionalism and commitment to quality.
  14. Negotiation Strength: Well-documented estimates provide a strong foundation for negotiations with clients, subcontractors, and suppliers.
  15. Legal Protection: Thorough estimates protect you from potential legal disputes by clearly defining the scope of work and associated costs.
  16. Improved Decision-making: Accurate estimates provide a solid basis for informed decision-making throughout the project lifecycle.
  17. Efficient Resource Procurement: Precise estimates help you procure materials and subcontractors at the right time and quantity, avoiding delays and cost fluctuations.
  18. Minimized Scope Creep: Detailed estimates help prevent scope creep by clearly outlining the project scope and associated costs.
  19. Client Education: Comprehensive estimates educate clients about project complexities and cost breakdowns, fostering better understanding and cooperation.
  20. Long-Term Growth: Consistent, accurate estimating contributes to your company’s long-term growth by attracting more clients and expanding your project portfolio.

In essence, estimating is the foundation upon which successful competitive bidding in the construction industry is built. It ensures fairness, transparency, and profitability while setting the stage for successful project execution.


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

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