FAQs: Why is Cost Estimation Crucial for Project Planning?

How do you determine the cost of my project?

Like indelible ink, the first quote a client may request, never goes away. The client will always expect that first forecast to be accurate and it rarely is. A quick answer is invariably the wrong answer when it comes to estimating project costs. We take the time needed to develop accurate numbers. Our solution: generate the information. We use our experience with similar projects to analyze each new one, and speak with each potential contractor and vendor to understand how much they would charge, and why.

Cost estimating is both an art — based on instinct and relationships — and a science, based on a systematic process in three stages: concept, detail, procure, aka bidding. First, conceptual pricing is based on square footage costs. Unless it's a modular home, no two buildings are alike. Second, we consider specific cost, time, labor, and materials. Then we create a detailed estimate. With an inexperienced architect, you could go through a whole design process and find out you're over budget. With us, the detailed estimate is active in design-development, so we can identify more specific costs for labor and materials. Third, we analyze the bidding results which are pricing commitments for contract. Let's say the project requires a metal roof. Three different contractors could give three very different prices based on the quality of drawings and specifications. In my experience, cost overruns happen with the low bids that typically underestimate the long run, or misinterpret the scope and its goals. Understanding the numbers and the people you'll be working with is so important. Finally, we use good judgment to select our team in the cost estimation process to minimize risks, ideally in the design process.

Why should I invest in cost analysis in the earliest stages?

Anticipation and clarity are balanced in this crucial part of the project. The anticipation can get foggy without proper analysis. Invest the time, I advise my clients, otherwise, you'll likely get blindsided. After a snowstorm, I wonder: How long is it going to take to shovel the sidewalk? Well, it depends. If the snow is wet or icy, it could take much longer and cost me a trip to the chiropractor. Likewise, in design and construction, you have to take into account many variables with logistics and supervision. Thorough cost estimation gives peace of mind. Having a reliable estimate of the cost, team member choices and materials selection helps define the quality of the building process. For example, solid stone rather than stone veneer will last centuries and yield a very high return on design. It's human nature to say: “Give me (quick) shelter from the blizzard.” Yet I encourage my clients to think long term, Spring is on its way.