How Do You Estimate A Construction Project: A Step-By-Step Guide


A Step-By-Step Construction Guide

Do you know there are over 3.7 million construction businesses in the US? In such a thriving competition, efficiently estimating a construction project is one thing that helps your business stand out from the rest.

Your company might offer many services, but you need a comprehensive construction estimate to win more clients. That’s why many companies use advanced construction software like Bridgit to automate workforce management and estimate a construction project.

Whether you’ve stepped into the construction industry or looking for a few tips, it’s never too late to learn something new. This step-by-step guide will help you estimate a construction project.

What To Include In A Construction Project Estimate?

Many think the construction project estimate only predicts how much money would be required. Of course, money is a part of estimation, but there’s more to it.

A construction project estimate has the following important parts:

  • Activities – Construction activities such as excavation, installation, and filling.
  • Resources – Machinery and labour required for the construction project.
  • Cost – The money is required to arrange all the construction needs until the project’s closure.

When considering the above construction features, you get clearer insight from the project estimation document. That will also help the stakeholders to understand the project requirements and take action accordingly.

Factors To Consider During Construction Project Estimation

Construction Project

Construction projects have a vast timeline that goes on for months, sometimes years. So it’s important to consider the following factors while estimating a construction project.

  1. Review The Project Scope

The scope is an important document that includes the key aspects of a construction project. It covers the whole project by pointing out the core activities that are:

  • Milestones – Smaller parts of construction activity are usually written in the master schedule.
  • Deadlines – The submission date of the tasks mentioned in the project schedule.
  • Goals – Your targets during the construction project include completing an activity without adding more resources, no matter what.
  • Costs – Money required for each construction activity.
  • Deliverables – Things to deliver to the client at the project completion.

So, always review the scope from the project planning document while estimating a construction project. That will give you helpful insights.

  1. Give The Client A Rough Timeline

Your client can be demanding because they have invested much in the construction project. Although they know the project will take time to complete, they need something to ease their restlessness.

You should pick up the master schedule and give the client a rough timeline. That timeline should never be the exact same thing that you mentioned in the document. Instead, you must increase the gap in the construction activities.

Doing that will comfort your client, who might receive deliverables before the schedule. That will become more beneficial for your business as you have successfully managed your client’s expectations.

  1. Outsource Activities

Another important factor while estimating a construction project is outsourcing activities that are irrelevant to you. For example, your professional team is competent in excavation, erection, and installation. These are the basic construction activities.

However, your team lacks knowledge of plumbing and electrical work. In that case, you must outsource these activities instead of spending time and money on giving training to your team. That will be a better idea to outsource such activities.

It’s quite rare that a single team knows how to complete each construction activity in the given time and budget.

So, write this factor in the estimate as it will help the contractor to arrange these activities. You will see that outsourcing such activities is more effective at the project close-out phase than training.

  1. Determine Procurement Cost

The procurement cost is related to the sourcing of construction equipment. Most of the time, contractors rent out machinery for a construction project instead of buying it.

The procurement process depends on the need for a construction project and the machinery. If renting the equipment is enough for the project, go for it. But if you think you might need that equipment long-term, there’s an option of buying it too.

Usually, contractors rent out the construction machinery because:

  • They have a strong network of procurement sources.
  • They know how long a machine will work for a particular project.

The procurement cost varies in both scenarios. Therefore, always confirm this factor before mentioning the procurement cost. That will help you prepare a professional project estimate.

  1. Keep An Eye On The Competition

You already know that the US construction industry is quite competitive. Since it’s another form of business, you must keep a check on the ongoing competition. Ensure you competitively set the price of the construction activities.

Of course, that will need some research, but it’s worth it in the industrial sector. Setting the right price for the construction projects will land you more clients.

Remember that you don’t reduce the prices and start losing money. That would be a huge mistake.

  1. Make A T&C Document

A Terms and Conditions (T&C) document is necessary, especially when collaborating with multiple stakeholders like clients and suppliers. That document ensures no hidden costs and surprises once the project is completed.

The document must also be clear enough and understandable by the client and other stakeholders. That document must also include what services you offer in the construction project. That’s a complete section of exclusions and inclusions in the T&C document.

  1. Professionally Document The Estimate

The construction project estimate is a professional document. Therefore, professionally create it before submitting it to the client. Remember that the client doesn’t know the construction jargon or technical terms.

So, always explain each factor as clearly as possible to eliminate ambiguity from the project estimate.

Another tip is to use a word processing tool instead of writing the construction estimate document by hand. That’s a more professional way that will boost your business reputation.


Estimating a construction project includes costs, resources, and activities. To prepare an insightful estimate document, you must include all these factors in detail. So, follow the above step-by-step guide to ensure a quality project estimation and win more clients in the construction industry.

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Preeti Shah
Preeti Shah is a person who loves checking out different styles and designs of houses. She took interior designing in college and is practicing in the field of home improvement for five years now. In her spare time, she is usually searching the web for interesting and fascinating home designs.


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