Six benefits of an accurate builder’s estimate amidst inflation

With inflation rising across the board, the construction industry is not immune. The South Australian construction industry saw the highest inflation in the country last year. Finding ways to save on major and incidental costs is a must for every builder, but it is not always easy to see where those savings can come from. Simple actions like improving the accuracy of your builder’s estimate can make all the difference.

A building estimate is a critical tool for any building project. When done right, it will give you all the details you need to get your next job rolling and make the whole building process easy. There are a few ways to get a builder’s estimate; when it comes to cost savings, getting the most accurate estimate is critical. It might not seem like a big deal, but even minor improvements in accuracy can have huge effects and reduce your construction costs in a number of key areas. By providing a comprehensive overview of a project, an accurate builder’s estimate helps you plan ahead, reduce budget overruns and build better connections with your network. Working the estimation process into your own planning early on is going to provide you with the best results, both for build efficiency and cost reduction. Let’s take a look at 6 areas where an accurate builder’s estimate can cut your costs.

An accurate building estimate allows for precise early budget planning and helps to ensure that the project stays within its budget from day one. The earlier you can identify cost overruns, the easier they are to address.

Early budget planning is also the ideal time to go over any potential issues with the client. This way you can add in any extras that are within their budget or catch any problems early on, rather than halfway through a build. Again, getting this step right (or wrong) lays the groundwork for every other part of the project. If the early budget details are accurate and well-formatted, the rest of the planning process becomes more simple.

A building estimate provides a comprehensive analysis of all the costs involved in a construction project, including materials, labour, equipment, and overhead costs. With all that information on hand, you can accurately budget each job, identify areas where you are not getting a good return on investment and create savings in those areas. Getting your initial cost analysis wrong can increase your outlay at every step, from budgeting to ordering and wastage. With prices at a premium, making every dollar go as far as it can will help your business succeed in difficult times.

With the early budget details well managed, constructing a detailed plan for the rest of the project is a much more manageable task. You’ve already caught any initial problems that the client may have, and the overall project budget has all your costs outlined.

But reducing construction costs is not only about budgeting. The next thing you want from your builder’s estimate is a detailed plan for the whole construction process.

An accurate building estimate will give you all the information you need to plan for a project all in one place, managing your budget, your take-offs, and working with supply lines. Having each of these components integrated means they will all be more accurate and your plans more detailed. This will start to minimise costs, both as a natural effect of streamlining and because each part works together better.

For example, being aware of supply issues early in the process means any necessary adjustments can be made and factored into your budget.

If you have an accurate estimate of your needs, then you can pass on all the relevant detail to suppliers and contractors. By providing the people you work with detailed and accurate information it will be easier for you to build lasting business relationships and negotiate better prices. As mentioned above, estimates can be improved by consistently working with suppliers you trust and having their prices naturally integrated into your take-off. This both saves you time and improves your budgeting.

If you want to see what a take-off can look like once you’ve had you suppliers’ prices integrated, then take a look at this example.

Any change orders made during the building process will mean cost blowouts. There are a number of factors that lead to upwards of 35% of construction projects having to make a significant change order from simple entry mistakes to adjusted design requirements. While some changes are beyond your control and mistakes will happen—no, it’s not always the apprentice’s fault—limiting the room for error is the first step to making sure you don’t have to get back on the phone. An accurate builder’s estimate gives you the best shot at getting it right the first time, every time.

Working with clients early on also helps to avoid changes of mind or breakdowns in communication. Make sure everyone is one the same page and work through the relevant parts of your builders estimate with the client so they aren’t grabbing you halfway through and making drastic changes.

Minimising waste is an obvious cost saver. Getting the most out of your materials is good for everyone. You’re saving on supply costs and waste disposal while also doing what is best for your client. With construction also contributing to about 40% of Australia’s waste, being able to minimise the impact of your business is something clients love to see and can be a selling point for your business.

An accurate building estimate helps to minimise waste by ensuring that only the necessary materials are purchased and that they are used efficiently. If you are ordering materials accurately, and all together, you can get the most from every length of timber and every sheet of metal and cut your construction costs.

Managing a business through a difficult economic period is not easy. It can be done, but every business needs all the help it can get. An accurate builder’s estimate is not the only solution, but it will make some big differences. By working the estimation process into your building process from the start, there are savings to be made at every step along the way. Discuss your estimation options with a V2E consultant or take a look at our samples to find out exactly how an accurate builder’s estimate will benefit your business.