How to Estimate Construction Costs

Before getting started on your next construction project, it’s helpful to estimate your costs so you can plan properly and stay on budget.

In this guide, we’ll share what goes into construction project costs, discuss soft costs and explain how to estimate overall expenses.

What Goes into the Cost of a Construction Project?

While the specifics may vary depending on the type of construction project, most involve materials, labor and equipment. Often there are also direct and indirect costs to take into account. When thinking about what may be involved in your construction project’s cost, it can be helpful to reflect back on similar projects and what they involved, too.

What Are Soft Costs in Construction?

Soft costs in construction are any expenses indirectly related to the building of a structure. Often, these are not visible and include non-tangible items, such as related fees or services. Examples of soft costs include:

  • Inspection fees
  • Taxes
  • Project management
  • Job site rentals
  • Accounting services
  • Bonding
  • Insurances

How to Estimate Construction Costs

To find your construction project cost estimate, it’s important to walk through the following steps.

  1. Divide Expenses Between Hard and Soft Costs
    To estimate your construction costs, first, separate your expenses into hard and soft costs. This helps you keep track of all your expenses and make sure you aren’t forgetting anything.
  2. Select a Method for Estimating Your Construction Costs
    Next, determine what method you want to use to estimate your construction costs. Some common ones to help you get accurate estimates include:

    • Lump Sum Bids: Break down your work by tasks, including everything related to the indirect costs to get your final price.
    • Unit Pricing: Calculate the overall project costs based on unit costs, such as square foot.
  3. Use a Construction Management Software
    Finally, to make estimating your construction costs even easier, consider using construction management software. These can help you forecast your project costs and keep track of your expenses.

Work with Northern Construction Today

Need help completing your project on time and within your budget? At Northern Construction, we have over 25 years of completing heavy civil construction across diverse industries. Contact us today to get a quote and your next big project going.