Estimating any size construction project may seem very straight forward. Material, labor, and subcontractor cost and maybe some equipment and miscellaneous items such as plans permits etc. Most of us pretty much have the above or a similar concept of the estimating process.

Lets look at each one of the factors above. How about the cost of your material? How much time should it take for labor to perform each task to complete a job. You may even add some money for warranties if something gets broken or some subs work is defective. Not to mention your own cost to keep the doors open. But unless you are fortunate enough to do mostly negotiated jobs you have a big problem and it has very little to do with the accuracy of your estimates.

Oh I have not shared with you a most important fact that needs to be understood by every company. Unless you sub everything out and most important you hold all subs bids for the job you will have to absorb the hundreds of variables that exist on any job site (Keep in mind) job sites are not factory controlled environments so there will be (not might) time and waste factors even if you do the exact same structure two or more times on different job sites, conditions and material delivered shortages or defects not to mention your labor efficiency variations from day to day.

Some activities or cost centers will be over budget and some hopefully under budget so in the real world most of the time things have a mysterious way of averaging out so your bottom line will be OK. Some jobs will be more profitable or less of a loss to balance out over a period of time.