A construction estimate can make or break your construction company. While an accurate estimate enables you to hit your revenue and profit goals, poor estimates lead to financial problems and expensive payment disputes. Download a free construction estimate template below, and customize it to your project.
Learn more about construction estimates (5 types)
Construction estimate templates
Below, you will find several customizable construction estimate templates in Google Sheets (Excel) and PDF format. These estimate templates have all the information you need for most construction projects, laid out simply and thoroughly to help you communicate with your client and avoid misunderstandings down the road.
Detailed construction estimate template
This detailed construction estimate template provides a comprehensive breakdown of most major components of a project, from planning to plumbing. This may be used for internal calculations or shared with a client, depending on your needs.
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Itemized construction estimate template
This blank, itemized estimate template allows you to input your own details about the project to provide a clear breakdown of the associated costs.
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The importance of a good estimate
This may seem obvious, but it bears repeating — a good estimate is the key to success as a builder. This is because the contracting game is won at the beginning, not the end. If your estimate is inaccurate, it will be almost impossible for you to make money.
An inaccurate estimate greatly increases the chances of payment delays, lien claims, and litigation. The biggest problem with an inaccurate estimate is that it leads to an inaccurate bid. Many, many disputes with clients begin as a simple misunderstanding of the scope of the work.
In the heat of the job, with money on the line, honest mistakes can be misinterpreted as dishonesty and your reputation (and the reputation of contractors in general) can take a hit. Clients see you — as they should — as an expert in your field, and put a lot of trust in your expertise and professionalism.
An estimate is not a contract. Make sure you clearly communicate this to your client when providing an estimate or a proposal.
A thorough estimate includes much more than just the value of the work to be performed. You also have a business to run, and that isn’t free. All of the costs of running your business ought to show up in some way on your estimate.
What construction estimate templates should include
Whether you use these templates, find one elsewhere, or create your own, a construction estimate should generally contain the following information.
Description of the work
If there are drawings and specs included, this is already largely covered. But if there aren’t — or if they’re incomplete — your description of the work is the basis for the whole agreement. By defining what is included in the work, you’re also defining what isn’t included, which can be critical if disputes ensue.
Duration of the work
We say it all the time, but time actually is money. You have to know in order to plan your next job (and the one after that) when your current job will end.
If your client makes changes, that can cost you in lost opportunity costs, additional labor, and additional supervision. Knowing exactly when the job should end saves everyone money and headaches.
Materials and labor
Sure, you’ve counted the units of each material — but make sure you understand the details. If a client wants ⅝-inch thick drywall and you’re estimating ½-inch drywall, you could end up eating the difference.
Make sure you’ve considered that the cost of materials can change significantly between the signing of the contract and the purchase of those materials.
Labor is more than just what you pay your crew per hour: Labor burden is a factor that represents all the various costs of hiring your workforce, like insurance, payroll taxes, benefits, Workers Comp, continuing education, certifications, safety equipment, etc. Even the office time spent on administering those things has to be paid for.
Hidden costs
Small miscellaneous costs can be a killer. Some contracts have the contractor pay for the permits, which can range from hundreds to many thousands of dollars.
Other hidden costs include gas for trucks, temporary shoring, site utilities, saw blades, trash hauling, and more. It’s a lot to keep track of, but if you don’t include it on the estimate, you’ll end up paying for it instead of having your client pay for it.
Profit
This seems obvious, but a surprising number of small contractors don’t figure their own profit into their estimates. Before you agree to take a job, you should know how much you should be leaving with in-pocket. That number ought to in your estimate, and ought to be the last thing you’re willing to adjust.
The industry standard is the 10-10 rule, meaning 10% for profit and 10% for overhead. (The actual average net profit for residential construction companies was 7.4% in 2017, according to the National Association of Home Builders.)
But also remember that 10% is an average. A small, complicated project might demand much more from you than a large simple one, so your profit ought to be based on more than a simple percentage. Weigh this carefully before you agree to do a job.
Don’t forget taxes: There’s a tax on your payroll, a tax on the materials you buy, and a tax on the profit that you make. Percentage-wise, they can total up to more than the profit you expect to make, so you have to be sure they’re accounted for.
Carrying costs
Payment to contractors at every level is notoriously slow, which means you are likely to do without the money you have earned for months. This lag is known as your carrying cost, since you are essentially carrying the debt instead of enjoying the money.
If you suspect there will be a significant lag between invoicing and being paid, factor this into your estimate so have a clear picture of the cost of the job.
Payment disputes
If things go badly, which they sometimes do, and you have to file a lien to get paid, will the job support that? Even though there are now more cost-effective ways to threaten and to file liens, they still cost money and, just as importantly, time. Including contingency costs for dispute resolution, spread over all of your jobs, can help keep you out of debt even when conflicts over payment arise.