Accurate project estimation is the backbone of a successful construction business. Yet, many builders – especially those just starting out – fall into common traps that can eat into profits and damage their reputation.
Here are five frequent estimation mistakes builders make and practical tips to avoid them.
1. Underestimating Costs
One of the most common pitfalls is underestimating the true cost of materials, labour, or equipment. This often happens when builders rely on guesswork or outdated prices.
How to Avoid It:
- Always request up-to-date material prices from suppliers. Using tools like TruTrade’s estimating service can help you generate real-time costs.
- Factor in hidden expenses like delivery fees, waste disposal, and site preparation.
- Build in a contingency fund—typically 10%–15% of the total estimate—to cover unexpected costs.
2. Failing to Account for Labor Hours
Many builders miscalculate how long tasks will take, leading to rushed work or unpaid extra hours. This mistake is particularly common when taking on unfamiliar projects.
How to Avoid It:
- Break each project into smaller tasks and estimate the time required for each.
- Be realistic about your team’s capacity and experience level.
- Use known labour rates for your estimates.
- Use past projects as benchmarks to refine your time estimates.
3. Overlooking Project Scope Creep/Variation Orders
Scope creep, or variation orders, happens when additional work is requested after the project begins but isn’t accounted for in the original estimate. This can leave you footing the bill for extra materials or labour.
How to Avoid It:
- Clearly define the project scope in your estimate and communicate it to the client.
- Include a clause in your contracts for additional work, specifying that changes will require a revised estimate which are agreed and paid for in advance.
- Use project management tools like TruTrade to track and control project stages, ensuring you stick to the agreed scope.
4. Not Including Profit Margins
Some builders forget to add a profit margin, especially when they’re trying to win work by offering the lowest price. This approach might secure projects but won’t sustain your business in the long term. Know your overhead costs to run your business and account for these in the estimate.
How to Avoid It:
- Decide on a fair profit margin (typically 10%–20% of the total cost) and include it in every estimate.
- Avoid undercutting competitors by offering unrealistic prices—focus on the value and quality of your work instead.
- Update your overheads in your TruTrade account and ensure your margins reflect reality.
5. Ignoring Site-Specific Challenges
Each site is different, and failing to consider unique challenges can lead to unexpected costs. For instance, poor access, difficult ground conditions, or weather delays can all impact the final cost of a project.
How to Avoid It:
- Visit the site before finalising your estimate to identify potential challenges.
- Add extra time and resources to your estimate if you anticipate difficult conditions.
- Communicate any site-specific risks to the client to manage expectations.
How TruTrade Can Help
Avoiding these mistakes doesn’t have to be complicated. With TruTrade’s estimating service, you can easily generate low cost, accurate, detailed estimates. By incorporating real-time material prices, built-in contingency options, and clear project stages, TruTrade takes the guesswork out of estimating—so you can focus on delivering great work.
Conclusion
Mistakes in estimation can cost you time, money, and clients, but they’re avoidable with the right tools and mindset. By learning from common pitfalls and planning carefully, you’ll build a reputation for professionalism and reliability. Professionally presented, detailed quotes instil confidence and transparency with your clients and will ultimately win you more projects. Ready to take your estimating to the next level? Sign up with TruTrade today and get it right from the start.
