How to Make an Estimate - Without Losing Money

Premiered Feb 29, 2024 #estimate #calculation #management How to Make an Estimate - Without Losing Money. A Comprehensive Guide to Accurate Project Estimation: Strategies for Avoiding Financial Losses. #estimate, #money, #construction, #calculation, #management, #budget, #How to Make an Estimate, # Without Losing Money When it comes to project estimation, precision is crucial to the success of any venture. As such, it is vital for professionals in industries such as construction, electromechanical assemblies, and similar fields to have a comprehensive understanding of the necessary steps and precautions to take in order to ensure a reliable quoted price. To assist in achieving these goals, we recommend viewing the following instructional videos. What is a budget, and how is it prepared? Before entering into the specifics of project estimation, it is important to understand the concept of a budget and its role in the process. Simply put, a budget is a financial plan that outlines the estimated costs and revenues associated with a particular project. It serves as a roadmap for the successful completion of a venture, and as such, it must be adequately prepared in order to avoid potential financial losses. In order to make a precise budget, it is essential to carefully consider the various aspects of the project, including the cost of direct materials, direct labor hours, as well as any necessary machinery and equipment. Each of these components plays a vital role in determining the overall cost of a project, and must be carefully estimated in order to ensure a reliable price quote. How to make an estimate: Without Losing Money When bidding on a project, it is imperative to have confidence in the quoted price, knowing that it is enough to cover all costs and ultimately result in a profitable venture. Failure to accurately estimate the costs of a project can not only lead to financial losses for the company, but it can also harm the reputation and credibility of the professionals involved. To avoid this scenario, it is crucial to follow proper procedures and techniques when making an estimate. By watching our series of instructional videos, you will gain valuable insights and practical tips to ensure your budget is precise and reliable. Whether you are looking to learn new strategies or refresh your existing knowledge, these videos will prove invaluable in your pursuit of precise project estimation. In conclusion, we understand the importance of accurate project estimation and the impact it can have on the success of a venture. By properly understanding and following the steps and precautions outlined in our videos, you can increase your chances of creating a reliable quoted price and ensuring a profitable result for all parties involved. So do not hesitate, watch our videos now and take the first step towards achieving financial success in your future projects.

Estimating Construction Costs

 

Premiered Feb 27, 2024 #estimation #projects #management Estimating Construction Costs Guide to Reliably Estimating - A Guide for Project Estimators. #estimation, #projects, #construction, #management, #estimating. #Estimating Construction Costs, #Estimating Construction Costs Expert Tips for Precise Project Estimation. If you are involved in the construction industry, electromechanical assemblies or other similar activities, or are about to start, we recommend that you watch these videos which detail the steps and precautions you should take to ensure that your quotes are reliable. Topics covered in this video Studying the tender document and supporting documentation. Technical visit to the works. How buyer inquiries are made. Evaluating the cost of detail engineering. The Risky Mistakes of Project Estimation When bidding, it is important to be sure that the price quoted will easily cover all the costs of the work and allow you to make a profit. Otherwise, you will not win a job, you will win a PROBLEM. This video series offers the perfect opportunity to gain or brush up on your existing knowledge. Explore Guide to reliable estimation: A Guide for Project Estimators.

Calculate Indirect Labor

How to Calculate Indirect Labor in Construction. 

Calculating indirect labor costs in construction involves identifying and quantifying labor expenses that are not directly related to specific construction tasks, but are necessary for the overall project. 

Here is a breakdown of the process:

  

Identify indirect labor costs:

1. Administrative staff: Calculate the salaries of project managers, supervisors, administrative assistants, and other office staff involved in overseeing the project.

   

2. Support staff: Includes salaries of support staff such as cleaning crews, security, and maintenance workers who indirectly contribute to the operation of that project.

   

3. Security personnel: Consider the costs associated with security officers, training, and equipment necessary to maintain a safe work environment.

   

4. Quality control/assurance: Account for expenses related to quality inspectors and material testing to ensure compliance with standards.

   

5. Equipment operators. If your work is not directly tied to a specific task, but supports the overall operations of the project, include your costs.

Calculate indirect labor costs:

Once you have identified these indirect labor components, calculate your costs:

1. Hourly rates or wages: Determine the hourly rates or wages for each category of indirect labor. Consult your Company's accountant.

   

2. Hours Worked: Calculate or track the number of hours each category of indirect labor contributes to the project.

   

3. Multiply Hours by Rates: Multiply the hours worked by the hourly rate or salary of each category to obtain their respective labor costs.

   

4. Sum of indirect labor costs: Add all the costs calculated for administrative, support, security, quality control and equipment operators to find the total indirect labor cost for the project. 

Example of calculation, with values to adjust according to the region or country:

• - Project Manager: $50/hour, working 40 hours/week
• - Security officer: $30/hour, working 20 hours/week
• - Administrative Assistant: $20/hour, working 40 hours/week
• - Quality Control Inspector: $40/hour, working 30 hours/week
• - Support staff: $15/hour each, working 80 hours/week together
• - Equipment operator: $25/hour, working 50 hours/week

Multiply the hourly rates by the hours worked for each category and add the costs to obtain the total indirect labor cost for the construction project.

Formula for total indirect labor cost:

Total indirect labor cost = (Cost of project manager) + (Cost of security officer) + (Cost of administrative assistant) + (Cost of quality control) + (Cost of support staff) + (Cost of equipment operator)

This calculation provides a comprehensive view of the indirect labor expenses we will have during a construction project. Adjustments can be made based on specific project needs and additional indirect labor categories.