5 Easy Ways to Estimate Your Construction Costs

Ian Mutuli
Updated on
Ian Mutuli

Ian Mutuli

Founder and Managing Editor of Archute. He is also a graduate architect from The University of Nairobi, Kenya.
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Construction businesses should be able to estimate a pretty accurate cost for any projects they are working on or will be doing in the future. The estimation cost includes two types of expenses, direct and indirect: Direct expenses include the equipment, labor, machinery, and the indirect expenses include the security, the utility, etc. 

There are various cost estimating companies that help you with the estimation of material quantities and their associated costs. All this and the other expenses give the construction company an approximated cost that will come out of a particular project. The estimated amount helps the company to decide how to go about things. It also helps the business determine what amount to put in which department of the project and keep things under budget. 

In this article, we will show you easy ways to estimate your construction. Before that, let us look at;

The Types of Construction Estimate

The estimate you give is not the final take. As you progress with the project, some things may need readjustments; that is why one needs to follow through with every estimation keenly. First off with the types of estimation is the;

  • Rough Estimate: This estimate is more of an assumption, not a solid figure. It helps if, as a construction, one has the know-how from the previous project. If you have worked on a horse property before and the current project aligns with that, you may be able to do a rough estimate.
  • Intermediate Estimate: This estimate is mostly for commercial projects. It comes into play as the project progresses and needs to determine the concept and project feasibility arises. This is the purpose of the intermediate estimate.
  • Preliminary Estimate: This estimate is more detailed and accurate. It gives more facts and can be used to budget for the project and to look for financing. It would help to have the numbers checked thoroughly before searching for project funding.
  • Substantive Estimate: At this stage, you will require some designs for the project. These designs will allow you to set the pricing for the construction materials, objectives, and deliverables. It is based on estimated unit cost and is used to ensure the project remains within the budget.
  • Definitive Estimate: This is the final estimation. It is more accurate than other estimates, and it is what you handover to your client. However, since it is based on assumption, it is advisable to leave room for some changes if anything happens.

5 Ways to Carry Out Cost Estimation

1. Production Function Method

With the production function, you relate the output of the construction project with the input. The input is labor, construction materials, and tools that will produce a certain extent. However, this method may fail to consider the indirect costs that are still part of the project.

2. Empirical Cost Inference Estimating Method

It uses statistics and analysts to determine the cost of the project. It is advisable not to venture into this method if you do not have someone proficient with statistics and regression analysis with Costcertified tools. Otherwise, it is a waste of time. The person who handles this estimation should do it as their primary job.

3. Bottom-Up Estimation Method

It is a popular method among many constructors in which the estimator determines the project's cost by highlighting every single expense that may be incurred. The estimator mostly has a checklist for this kind of estimation. However, though it is accurate, it is time-consuming and may drag the project.

4. Unit Cost Estimating Method

Unit cost estimation is fast and reliable. It is carried out by forming a unit cost for every other stage of the project. The planning and project sourcing is one cost, and the framing and electrical work get a different cost. This method's flexibility allows you to modify and alter the costs for better estimates.

5. Expert Judgment

Suppose this is your first construction project and you do not have experience in cost estimation; it would be best to consider getting an expert to do the estimate for you. The expert is highly experienced in construction work, and as such, they can give you relation and evidence-based estimation. It would be best to remember that even experts do make mistakes, and as such, their estimations may not be 100% accurate and may be subject to prejudice.


In the construction business, one should use one of the most effective techniques to calculate the estimates of the project. However, regardless of the method one chooses to take up from production cost, bottom-up, unit cost estimation, empirical cost inference estimation, and expert judgment, it is best to remember that errors could be made as no method is perfect. The constructor can determine the ideal approach with the knowledge of the types of estimation like preliminary, substantive, intermediate, rough, and definite estimation.

Ian Mutuli

About the author

Ian Mutuli

Founder and Managing Editor of Archute. He is also a graduate architect from The University of Nairobi, Kenya.
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