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What does it take to have accurate estimates when it comes to construction project management?聽To have a successful project, you have to start from the cost management.聽Let鈥檚 put it like this.聽You won鈥檛 get the final picture of the project until you accurately calculate the whole cost.聽What would construction managers do?

They tend to find a shortcut and skip this step.聽That鈥檚 totally wrong.聽This is one of the biggest reasons why they suffer big losses and have unsuccessful projects.聽You, as a construction project manager, need to establish a cost estimating strategy.聽That鈥檚 a must.

If you ask other managers who play under the same rules, how they do it, one of their key features would be accurate construction聽management cost.聽It鈥檚 like going in the market. You have accurately calculated the cost at home.聽You know exactly how much money you will spend and you can already predict the final outcome.聽You get the point.

Now, how to develop a good cost estimating strategy?聽Three simple steps will lead you to the most accurate cost estimate.聽All three are designed to lead you through the whole process.聽By incorporating them, you will satisfy the cost management with all the knowledge you鈥檒l get while designing the strategy – mixed with the knowledge from all the previous projects you鈥檝e handled.

1. Initial rough estimates

You already know what鈥檚 in this step.聽This step is developed during the first phase.聽It鈥檚 largely based on all the information provided in the high-level scope along the info from previous projects the manager dealt with or similar projects he has heard about.聽This first rough estimate needs to be presented as a part of the Concept Proposal.

2. Intermediate estimates

When the planning phase is ongoing, the analyst and project manager both develop the customer鈥檚 review and approval.聽This will later define and clarify the project estimates.聽Furthermore, more details will be provided to the project management team.

They will help the project manager with the estimates.聽After this, the project manager is creating a detailed project schedule.聽It will contain:

• 聽聽聽聽聽Duration and effort for every task
• 聽聽聽聽聽Assignment of resources for every task
• 聽聽聽聽聽Complete and detailed cost management of the project effort

3. Final detailed project estimate

These detailed project estimates allow the project manager to refine some of the tasks and add the whole estimation of costs.聽This includes hardware, software, equipment tests and additional space for the project team.聽When you as a project manager get to this point, you will be allowed to update the initial estimates created for the Concept Proposal.聽You can make replacements to reconcile the more accurate total project cost info.聽This new estimate needs to be communicated to the project stakeholders.

You can definitely try this strategy today and see if it is right for you. Also, one of the main things here is the fact that you should constantly be on a lookout for improvements or add-ons to this strategy.聽You can do this by having a cost control during the execution.

Supplement this article with related cost estimating blog posts like the one on聽project cost estimation, valuable聽steps to take before doing a聽construction work estimate,聽and a general guide on how to聽reduce the high costs in a construction business. Top it all off by downloading a free ebook on improving productivity on the work site.