Pre-construction 101 – The Role Of Conceptual Estimating

What is Pre-construction? 

The definition of pre-construction could be summed up as the design stage, but that would be an oversimplification. Pre-construction activities may include preparing designs, but this stage can also include project planning, site assessments, budget development, estimate creations, or helping to gather resources. It’s many potential activities. At the end of the day, what you should get out of the pre-construction stage is a better understanding of cost, scope, and schedule.

What is the general purpose of construction cost estimating?

Cost estimating is the process of listing out and forecasting all the costs related to a construction project to ensure that projects remain within budget and timeline. It involves the steps of gathering and analyzing data, creating estimates, and evaluating. The cost of a project considers materials, labor, and equipment.

Why do you need pre-construction estimating?

Cost estimates help you understand a project opportunity, and they give you a baseline to make informed business decisions. It might sound like an exaggeration, but projects can fall apart and companies have shut down operations because of poor estimates. Estimates not only give you an idea of cost, but they also give you an idea of how long projects will take. Remember, project time and cost are critical to your success. Both factors go hand in hand, and you need to track them throughout the project lifecycle, from conceptual to construction.

Conceptual (or pre-construction) estimating play a crucial role during the early stages of every opportunity. They help owners, lenders, architects, and other industry professionals price properly, and allow all parties to make better decisions. Think of estimates as your compass and a guide that will tell you if this is a path still worth pursuing. Your estimates will have phases and will develop as your opportunities progress. It’s never a matter of doing it once and forgetting about it.

The benefits of accurate estimates at any stage

Although estimates by nature are not accurate, we can leverage our history, experience, and technology to get closer to the bullseye. The more accurate the estimate the closer we are to successful outcomes. Problems arise when accuracy can range from 5% to 40% +, and that stack of estimates is compared side-by-side. The numbers matter. Lost profits, damaged reputation, and missed deadlines can be prevented with defensible estimates.

But an estimate is only as good as the cost data it’s based on and the professional creating it.

How to get dependable conceptual cost estimates without investing too much of your time?

Conceptual cost estimating is a method of establishing a preliminary cost for a project before breaking ground.

You can lean into historical data, industry standards, use software, or a combination of methods to save time on creating early stage estimates. Below are 3 ways to get better accuracy without spending too much time in the weeds.

  1. Outsource/Use a service – It’s the fastest way to scale. Many of our clients come to us to help them prepare cost estimates for their construction projects. We started as Project Time & Cost (PT&C) in 1982, and our service division continues to this day. This 40 years of experience within this industry. While our services haven’t changed, our industry knowledge and methodologies have adapted to meet modern standards. In our daily work, we often consult on everything from building custom models to providing program management and it’s all backed by technology.
  2. Delegate – You have to grow your team and lean into a cost estimator. Or, if you would prefer to focus on cost estimating yourself, you hire to fulfill other business needs. If you are in a smaller company, you are more than likely wearing the hat of business admin, sales, and more. Delegate the tasks that you are not passionate about. No matter who is driving your cost estimating team, remember to work on your internal knowledge base. Build your own company cost database and estimate library so you can use your historical data on future projects.
  3. Specialized software – Your tech stack is your toolbox. For a minute, think of your typical household masonry work and you need to anchor a hook to a home’s brick exterior. Could you accomplish this task with a rock and spike? Maybe. Could you do it with a hammer? Sure. How about a drill? Yes. But why wouldn’t you use a specialized hammer drill to do that same work? The same logic applies to your technology stack.

The act of estimating has changed very little throughout the years. But the tools available to us as professionals have. It is software that gives us access to maintained data and intelligent insights. It is the software that streamlines our work and reduces human error. We’re at an exciting moment in history where cost professionals can use pre-built models for faster and more reliable outputs. Changing material types and locations now only takes a fraction of the time. By adopting new construction technology, cost professionals can make better use of their time and energy.


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