Completing projects within budget is a constant challenge for many contractors. In the past three years, only 31 percent of construction projects came within 10 percent of their budgets, according to RSMeans, a provider of construction cost information. Here are five estimating mistakes to be aware of, along with best practices to combat them.
- Unrealistic expectations – Don’t rely on ideal or worst-case scenarios, which can lead to impractical estimates. Find the middle ground to avoid setting expectations too high and blowing timelines.
- Flying solo – Don’t be afraid to use outside data sources from a credible third party. Create a realistic estimate by including a combination of your own historical data and their custom data.
- Lack of or wrong permits – If you lack permits or have the wrong type, work can come to a standstill. Factor proper permits into your estimate, as well as their corresponding costs.
- Unclear parameters – Parameters must be established clearly at the onset of each project. Make sure you clearly understand your clients’ limitations and restrictions before creating an estimate to avoid unnecessary change orders.
- Missing details – A lack of knowledge, missing items or generalized task descriptions can lead to estimates that are too low. Take the time to account for all necessary materials, labor, and equipment by referencing similar work done in the past or detailed cost data from a third party.
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