Estimate

What is an Estimate?

An estimate is a detailed calculation of the anticipated costs for a construction project. It breaks down all expected expenses including materials, labor, equipment, permits, and overhead to give clients a clear picture of project pricing.

Estimates serve as the foundation for project contracts and help both contractors and clients understand the financial scope of work before beginning.

Types of Estimates

Rough Estimate

A preliminary cost assessment based on basic project information, typically accurate within 25-30%.

Detailed Estimate

A comprehensive breakdown of all costs, materials, and labor hours, typically accurate within 5-10%.

Unit Price Estimate

Pricing based on cost per unit (square foot, linear foot, etc.), useful for standardized work.

Key Components

Materials: All supplies needed for the project, from lumber to fixtures.

Labor: Worker wages, including skilled trades and general labor.

Equipment: Tool rentals, machinery costs, and transportation.

Overhead: Insurance, permits, utilities, and administrative costs.

Profit Margin: Your business profit, typically 10-20% of total costs.

Best Practices

• Always include a detailed scope of work
• Break down costs by category for transparency
• Add contingency amounts for unexpected issues
• Include terms for changes and additional work
• Provide clear timelines for estimate validity

Common Mistakes

Underestimating labor hours: Always account for setup, cleanup, and unexpected delays.

Forgetting permits and fees: Include all regulatory costs upfront.

Not including overhead: Factor in your business costs to stay profitable.

Being too vague: Detailed estimates build trust and reduce disputes.