Accurate estimates are the foundation of any successful construction project. They guide financial decisions, resource allocation and ultimately, project success.
Whether you’re a seasoned estimator or just starting out, it’s crucial to continuously refine your skills and processes.
However, winning construction bids in today’s market is no easy feat. Rising project costs, fluctuating market conditions and the ever-present risk of delays all threaten profitability. So, how can you gain the edge?
A recent survey by Cornerstone Projects found that 29% of construction professionals believe the best way to prevent delays is through improved preconstruction information.
This includes detailed site conditions, high-quality drawings and, most importantly, accurate estimates.
To win more jobs and ensure project success, you need to know:
- The current industry landscape
- The available tools and tactics
- The key considerations before starting any estimate
This guide will equip you with the knowledge you need to become a more efficient and successful construction estimator.
Key Takeaways for Estimators:
- Construction estimators need a combination of expertise, technology and awareness of the market to increase their chances of winning projects.
- Construction estimators must stay informed about these industry trends to provide accurate estimations.
- Estimators must continuously update their knowledge by staying informed about material cost fluctuations and evolving construction techniques.
- Leveraging trade-specific takeoff and estimating software for the construction industry offers significant accuracy, efficiency and overall project management advantages.
- By having accurate estimates from the start, estimators greatly increase the likelihood of winning jobs.
What Makes Winning Construction Estimating Jobs So Competitive?
To win more estimating jobs, it’s essential to comprehend the competitive nature of the industry. The construction market is one of the most competitive markets in the United States with a total worth of 1.8 trillion USD, according to Statista.
Starting any construction project in the current market is stressful and without successful construction estimating, there is no chance of thriving in the industry. However, winning construction estimating jobs can be highly competitive.
To overcome these challenges, construction estimators need a combination of expertise, technology and an awareness of the market to increase their chances of winning projects.
They also need to really understand cost estimating, which is the most common estimating method in construction.
A cost estimate calculates the cost of a construction project. It is the product of the estimating process that estimators use when preparing a bid for a construction job. The cost estimate is one of the most critical steps in the bidding process because an accurate estimate helps your construction business win jobs and stay profitable.
The total job cost includes many factors, such as labor hours, indirect costs, construction materials, and equipment costs, to name a few. Providing accurate estimates can help you turn potential clients into loyal customers, helping you to grow your business.
By excelling in these areas, construction contractors can position themselves to win bids on large and competitive construction projects.
Thin Profit Margins
Contractors often submit bids that are very close to each other, leading to razor-thin profit margins for the winning bidder.
Remember to not chase every bid. Develop a niche specialization and focus on projects where your expertise can provide a competitive advantage.
Complex Projects
Modern construction projects are increasingly complex with heightened safety expectations and tasks being broken down into specialized trades instead of general labor.
Accurate estimates for complex projects require a detailed comprehension of the project’s scope, materials, labor, equipment and potential challenges.
Immersing yourself in project specifications, costs of materials housed locally, geotechnical reports and environmental assessments can uncover hidden complexities that could impact costs.
Estimators must also identify and quantify potential risks that could impact the project’s timeline and budget.
Be sure to develop contingency plans for each identified risk that outline mitigation strategies and all associated costs, allowing you to factor them into your initial estimate.
Rapidly Changing Industry
Economic conditions, supply chain disruptions and labor shortages can significantly impact project costs and influence construction demand.
During economic booms, there are more projects but also more competitors. Conversely, during downturns, fewer projects lead to fierce competition for available jobs.
Staying up to date with industry advancements such as technology is essential to maximize efficiency and accuracy helping you earn more projects.
Develop flexible estimating processes that can be adjusted based on changing market conditions and demonstrate your willingness to adapt to changing circumstances to help secure the job.
High Stakes
Accurate estimating is critical to a construction company’s success.
Underestimating a project can lead to financial losses or even bankruptcy while overestimating can result in losing the bid altogether.
Invest in tools that help analyze every aspect of the project like construction takeoff and estimating software.
These tools improve accuracy and allow for dynamic cost adjustments during the bidding process to build trust with clients.
Client Expectations
Clients often prefer experienced contractors with a track record of on-time and on-budget completion.
Newer or less experienced firms must work harder to prove their worth with comprehensive and detailed estimates.
To help ensure you are chosen, try to quantify your past successes. Showcase metrics like the percentage of projects completed within budget and timeline.
Tight proposal deadlines can also put pressure on estimators to deliver accurate estimates quickly.
To maintain transparency with clients, communicate any potential delays in advance and manage client expectations proactively.
What Tools Do Successful Estimators Use?
The construction industry is constantly evolving, with new materials, technologies and techniques emerging. Construction estimators must stay informed about these industry trends to provide accurate estimations.
Continuous learning and adaptation are key to a construction estimator’s success.
In today’s digital age, estimators must rely on specialized software and tools to streamline the construction estimating process. These programs not only increase efficiency but also enhance the accuracy of estimates.
- Estimating and Takeoff Software: This software can streamline the estimating process, and provide more accurate quantity takeoffs, material calculations, labor costing and bid generation.
- Project Management Software: These estimators create detailed schedules, allocate resources efficiently and track project progress. This transparency helps organize project information, collaborate with teams and track progress.
- Data Analytics Tools: For identifying trends, analyzing historical data and making informed decisions. This can significantly enhance accuracy and profitability.
As technology continues to advance, so will the role construction estimators play.
Automation, Artificial Intelligence (AI) and Building Information Modeling (BIM) are becoming integral to the estimation process.
Proficiency in these devices can not only increase the efficiency and accuracy of estimations but also improve estimators’ chances of winning projects.
What Tactics Do Successful Estimators Follow?
Estimators must continuously update their knowledge by staying informed about material cost fluctuations and evolving construction techniques.
Developing strategic bidding approaches that consider project profitability, the competitive landscape and existing client relationships.
Successful construction estimators follow a multi-step approach to ensure accurate and competitive bids:
- First, estimators gain an understanding of the project by thoroughly reviewing plans, specifications and even site conditions.
- This helps them grasp the project’s scope and complexity.
- Next, they meticulously calculate material quantities needed to minimize errors and avoid cost overruns during construction.
- To create a comprehensive picture of project finances, they develop a detailed cost breakdown that considers labor, materials, equipment, subcontractor involvement and overhead expenses.
- Finally, they employ value engineering – a process of identifying opportunities to reduce costs without sacrificing project quality or functionality.
- Effectively managing change orders, or modifications to the project scope, to keep the project budget and timeline under control.
Beyond initial calculations, successful estimators are proactive risk managers.
They identify potential challenges that could disrupt the project and develop contingency plans to mitigate their impact on the budget.
For example, by leveraging historical data from past projects to inform pricing strategies, estimators can identify cost trends and continuously improve the accuracy of their estimates.
With this comprehensive approach, construction estimators can significantly increase their chances of building successful estimates for construction jobs, winning bids and contributing to the overall success of their company.
What Traits do Successful Estimators Possess?
According to Commercial Property Executive, construction costs will continue to rise up to 7% throughout the next year.
To manage these rising costs, estimators must be prepared to find cost-saving opportunities while estimating to help win more jobs.
Finding these types of options requires estimators to possess construction knowledge, business acumen and project management capabilities.
Knowledge
Successful construction estimators need to possess knowledge of complex construction processes, including the ins and outs of various construction techniques.
Proficiency in estimating software is crucial for streamlining the process.
Additionally, strong analytical skills are essential to accurately analyze project plans, specifications and cost data.
Having meticulous attention to detail is vital, as even minor errors in estimates can be costly.
Business Acumen
A successful construction estimator needs a keen eye for business as well.
This knowledge allows them to develop profitable strategies. Estimators need to analyze bids to ensure they are competitive while still maintaining adequate profit margins for the company.
Having firm financial insight also allows construction professionals to make sound decisions throughout the estimating and project management process.
Project Management
Effective project management skills are another key aspect of a successful construction estimator.
Practicing proper time management and ensuring project deadlines are met without sacrificing the accuracy of an estimate is a major undertaking for estimators.
Be sure to maintain detailed records and documentation to help keep the project on track.
Additional Factors
Building strong relationships is also key.
Establishing trust and fostering collaboration with subcontractors, suppliers and clients not only improves communication but can also lead to more favorable contracts and project outcomes.
Why is Takeoff and Estimating Software so Effective?
Using construction takeoff and estimating software can revolutionize how estimators create accurate estimates.
According to Propeller, 61% of construction professionals report that technology reduces project errors.
Leveraging trade-specific takeoff and estimating software for the construction industry offers significant accuracy, efficiency and overall project management advantages.
Increased Accuracy
- Precision Measurements: Software enables precise measurements directly from digital blueprints, minimizing human error.
- Consistent Calculations: Automated calculations for quantities, areas and volumes ensure consistency and reduce mistakes.
- Data Integrity: Centralized data storage prevents errors caused by manual data transfer.
Enhanced Efficiency
- Time Savings: Automated tasks like quantity takeoffs and material calculations drastically reduce manual effort.
- Faster Bid Preparation: Streamlined processes accelerate bid preparation, allowing for more competitive bidding.
- Improved Productivity: Estimators can focus on complex decision-making rather than tedious calculations.
Better Decision Making
- Data-Driven Insights: Software provides detailed reports and analysis, enabling informed decision-making.
- Cost Optimization: By comparing material and labor costs, estimators can find cost-saving opportunities.
- Real-time Updates: Multiple team members can access and update project data simultaneously.
Additional Benefits
- Scalability: Handles large and complex projects efficiently.
- Integration: Seamlessly integrates with other construction software for a complete solution.
- Customization: Adaptable to specific company needs and processes.
See How The EDGE® Can Help You Win More Construction Estimating Jobs
Winning more estimating jobs in the construction industry requires a strategic approach. Being aware of the competitive landscape, utilizing effective tools and tactics and maintaining a strategic mindset are key components of success.
Takeoff and estimating software acts as a powerful ally in this endeavor, offering efficiency, accuracy and a competitive edge. By integrating these tools into your estimating process, you can enhance your chances of securing more jobs and driving your business forward.
Tools like The EDGE, takeoff and estimating software that is designed for the interior and exterior trades, can streamline the estimation process and improve accuracy and efficiency. With built-in trade templates, estimators can use the software to upload information quickly while building bids.
Contact us today to book a demo with one of our construction estimating experts!
