Estimating the construction cost is the first step in planning the construction project. Regardless of the type of building, construction estimation plays a vital role in the success of the project. The estimation process is a very complex and sophisticated process and if there is a loose end or mistake, it can have a great impact on the success of the project. It is considered a skillset where the estimator has to learn using manual estimation method, automated software as well as proper study, training, and experience to be able to provide an accurate estimation. It is better to rely on professional services as this will save money, time and you will be able to get accurate results. In case, you still want to do it on your own, there are certain things that are a part of the whole procedure and they must be taken into account.
The estimator needs to know about the effect of any negligence as well as how to finalize the cost estimation. He must know that there are various categories of costs which mainly include direct cost and indirect cost. Within the direct cost, we include team wages, fuel expenses, equipment costs whereas, in the indirect cost we can add security cost, utility costs, etc.
To understand further, here are a few of the basic Cost Estimation Techniques that everyone needs to know before estimating the construction cost in any given project.
Three-Point Estimating Technique
This technique is a mixture of program analysis and review techniques that will mainly help in estimating the overall project cost, duration as well as analyzing the optimistic and pessimistic approaches. This method will use different formulas for cost estimation, however, this only works well for the preliminary cost estimation.
Empirical Costing Technique
This technique is useful if the estimator has already dealt with a similar project before. The data that they have from previous projects can be used for estimation of future projects and this is known to be a quick and reliable technique especially for small houses etc.
Analogous Estimating Technique
Usually known as a top-down technique of cost estimation, this method uses the historical project data and then predicts the cost estimate for the new project. however, the projects have to be similar just like the project under consideration.
Analytical Estimating Technique
Known to be a bottom-up estimation technique, this cost estimation technique divides the overall project into activities, work packages, and other series. Then the estimation is done by estimating the cost of each task and then adding up the cost of each task. This technique is said to be the easiest, accurate and most commonly used technique.
Even after knowing all this, it is very important to understand that the cost estimation is only successful if accurate, credible, reliable as well as precise. To make this possible, the estimator needs proper skill sets, experience, study, and tools. If you want accurate results it’s important to know that no matter how much you know about the techniques, it’s better to rely on professional services rather than trying on your own.