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Construction Cost Estimation: Tools and Tips to Stay on Budget

Writer's picture: Cody MeirickCody Meirick

Embarking on a construction project without a solid cost construction cost estimation plan is... well, not a good plan. Get it together. Accurate cost estimation is your project's guiding star, making sure that you stay within budget and on schedule. For small- to mid-sized businesses, it can be the difference between staying afloat or not.

construction cost estimation

Imagine having a toolkit that not only helps you forecast expenses but also adapts to market fluctuations and unforeseen challenges. Modern cost estimation tools offer precisely that, enabling you to anticipate costs with greater precision. By leveraging historical data and advanced analytics, these construction cost estimation tools illuminate the path forward, easing the uncertainty that typically envelops any forecasting process.


It's also about being aware of the pitfalls. Such as escalation. "Understanding escalation is critical for project managers and facility planners," according to Building Design + Construction, "especially concerning labor and building materials. These rates could vary significantly from general economic inflation, stressing the need to represent expected cost increases accurately."


So, let's address some overall tips and new technologies that are being talked about in construction cost estimation.


Tips from the Experts

It would be helpful to go over some tips that can help in your construction cost estimation needs. There is a continual divide when it comes to AI adoption and other new technologies... between big businesses and the smaller ones. It's a problem. Let's look go over some of the problems and pressures that small- to mid-sized businesses face in this particular sector.


Prioritize Detailed Planning

A comprehensive plan is the foundation of accurate construction cost estimation. Clearly define the project's scope, materials, labor requirements, and timelines. This level of detail helps prevent unexpected expenses and ensures all stakeholders share a unified vision.


Investing time in meticulous planning can reveal potential challenges early, allowing for proactive solutions. It also involves creating and fine tuning a solid schedule. "The schedule," says CrewCost.com, "should clearly communicate who is responsible for what and when it needs to be completed. Setting and following a schedule helps prevent putting the estimate off until the last minute.

construction cost estimation

Choose Cost-Effective Construction Methods

Selecting the appropriate construction method can significantly impact your budget. For instance, pre-engineered metal buildings often offer a more economical and faster alternative to traditional construction methods.


These structures are not only cost-effective but also durable and flexible in design, making them suitable for various commercial applications. Opting for such methods can lead to substantial savings in both time and money.


Implement Value Engineering

Value engineering involves analyzing the project's components to achieve the desired function at the lowest cost without compromising quality. This process encourages creative solutions and efficient resource utilization.


By focusing on essential functions and exploring alternative materials or methods, you can reduce expenses while maintaining performance standards. Engaging in value engineering early in the project can lead to significant cost savings.


Monitor Market Conditions

Construction costs are influenced by market fluctuations in material prices and labor rates. Staying informed about these trends allows for more accurate budgeting and timely purchasing decisions.


Regularly reviewing market conditions helps anticipate cost changes and adjust estimates accordingly. This proactive approach ensures your project remains financially viable despite economic shifts.



New Tech for Construction Cost Estimation

Let's look at some of what is out there when it comes to construction cost estimation. Many of them are increasingly using AI to help you get the job done accurately, efficiently... in some cases, leveling the playing field for small- to medium-sized businesses that could really use it.


First, there is Estimator360, which is a comprehensive construction management platform designed to streamline project planning and estimation. It includes features like a built-in CRM, project scheduling, and financial tools, making it a versatile choice for contractors handling diverse tasks. However, the pricing starts at $369 per month, which could be a barrier for smaller firms. While its extensive features make it robust, they can also feel overwhelming for users without proper training.


Then there is Clear Estimates. It is tailored specifically for residential contractors and offers an easy-to-use interface. It provides a regularly updated cost database by region and a customizable bid proposal editor, enabling quick and accurate estimates. At $79 per month, it’s more budget-friendly for small businesses. On the downside, its focus on residential projects means it may lack the tools needed for larger commercial endeavors, and it has limited integration options with other software.


Next is Procore Estimating, which is a cloud-based solution that integrates estimating with project management, allowing users to transition from cost planning to execution. The platform enables one-click creation of budgets or schedules of values (SOV), ensuring data consistency across all project phases. It is a unique construction cost estimation option. While its features are powerful and facilitate collaboration, the pricing is not disclosed publicly, requiring users to contact Procore for a quote. This could be a disadvantage for small-scale projects where Procore’s advanced tools might be unnecessary.


Have you heard of STACK? It is another cloud-based tool, compatible with both Mac and PC, that focuses on being an "all-in-one" solution for estimating, building, and operations. It supports digital plan measurements, material and labor cost estimation, and bid proposal generation. Accessible from any device with internet connectivity, STACK offers flexibility for contractors on the go. However, pricing details are not readily available, and the tool may lack the advanced project management features some users require beyond estimating.


Finally there is PlanSwift. It specializes in takeoffs and estimating, helping contractors quickly calculate costs and potential profits. Its interface allows for rapid adoption, and its customizable templates suit various project types. While PlanSwift is intuitive and time-saving, its pricing is not transparent, and its capabilities are primarily focused on estimation, meaning contractors may need additional tools for broader project management needs.


Ready to Explore the AI Revolution?

AI innovation checklist

Ready to make AI work for your construction business without the headache? Our free AI checklist is your ultimate guide to getting started. You would be surprised how much AI in construction cost estimation could create efficiencies that make a world of difference! Whether you’re exploring tools to boost productivity, streamline operations, or make data-driven decisions, this checklist breaks it all down into simple, actionable steps.


Don’t let the complexities of AI hold you back. Download the checklist today and take the first step toward transforming your business with smarter, more efficient solutions. It’s completely free!







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