What Is The Rule Of Thumb For Construction Estimating?

Precise construction estimation is crucial for the success of a construction project. Typically, estimation involves predicting the cost, resources, and timelines required to complete a project. It also helps the construction stakeholders avoid delays, disputes, and cost overruns. There are plenty of ways to calculate the construction cost; the rule of thumb is one of them. 

The rule of thumb for construction estimating is to use basic guidelines to estimate various aspects of a construction project quickly. These guidelines are typically based on historical data, experiences, and industry knowledge, which provide estimators with data to estimate costs. They serve as a valuable asset during the early stages of a project when detailed information might be unavailable or limited. Additionally, they offer quick references and help the estimators estimate initially effectively. 

This comprehensive blog post will discuss the rule of thumb for construction estimating, its purpose, and its advantages. Additionally, we will highlight the top construction cost estimation services available in NYC. Let’s explore the rule of thumb for construction estimating, but before we go ahead, have you been searching for “construction estimating services near me?” Then, My Virtual Estimator can help. They are the best in the business and have over a decade of experience in estimation services. Let’s begin by exploring the rule of thumb for construction estimating. 

The Rule of Thumb for Construction Estimating:

A common rule of thumb in construction estimating is the “Rule of Two,” where labor costs are estimated to be roughly half of the total project cost. It means that if a task is estimated to take X man-hours, the total cost could be doubled (X*2). Additionally, it is often adjusted with a contingency allowance and profit margin. 

The rule of two suggests that labor costs represent about half the total project cost. Therefore, if a contractor estimates that a particular task will require 10 man-hours, the total cost could be roughly estimated at 20 man-hours. The Rule of Two should be used with a contingency allowance and a desired profit margin. A common practice is to add 10% to the doubled labor costs for these additional factors. 

For example, if a project requires 200 man-hours of labor, the Rule of Two would suggest a total cost of 400 man-hours. Adding 10% for contingency and profit would result in a final estimate of 440 man-hours.

The Purpose of Employing Rules of Thumb in Construction Estimating:

The primary purpose of using the rule of thumb for construction estimating is to provide a quick estimate during the early stages of a project, especially when detailed information is unavailable and estimators have limited data. Some benefits of using the rule of thumb in construction estimation include:

1. The rule of thumb allows for quick estimation, saving time and effort during the initial planning phases. 
2. It provides a baseline for estimates, enabling estimators to generate preliminary figures swiftly. 
3. It facilitates an initial evaluation of project feasibility and budget considerations before committing to detailed design and engineering work.
4. It aids early decision-making by offering a rough cost indication. 
5. The stakeholders can assess a project’s feasibility and financial viability, aiding them in making informed decisions about project initiation, budget allocation, and resource planning.
6. It serves as a standard for comparing estimates across similar projects. 
7. By referring to previous standards, the estimators identify deviations, outliers, and potential cost-saving opportunities, which promotes effective cost control and budget management.
8. It promotes effective communication, collaboration, and understanding, allowing seamless coordination throughout the project lifecycle.
9. It helps establish initial budgets, enabling project teams to outline financial requirements and evaluate a project’s economic feasibility early on.
10. They provide a simplified approach that estimators can easily grasp and implement, even with limited technical knowledge.

When to Use the Rule of Thumb in Construction Estimation

The rule of thumb is most effective during the conceptual or planning phase of a construction project. When detailed blueprints, specifications, or material breakdowns are unavailable, a general guideline assists stakeholders in gaining an early financial outlook. For example, developers, investors, and contractors often need to make quick go/no-go decisions based on preliminary figures. The rule of thumb serves as a foundation for budgeting, communicating with clients, and aligning expectations. While it shouldn’t replace detailed takeoffs and professional estimates, it helps create cost scenarios and broadly compare design alternatives. This approach is beneficial in fast-paced environments like New York City, where time is money and swift decisions drive project momentum.

Limitations of Relying Solely on Rules of Thumb

Although rules of thumb are convenient and time-saving, they have limitations and should not be used as the basis for budgeting a construction project. These estimates often rely on generalized assumptions that may not account for specific project requirements, site conditions, or regional cost variations. For instance, labor and material costs in NYC can be significantly higher than in other areas, making a one-size-fits-all approach inaccurate. Over-reliance on such methods can lead to budget overruns, change orders, or disputes. Therefore, while the rule of thumb is useful for early-stage planning, it should always be followed by detailed estimates using accurate measurements, vendor quotes, and a professional estimator’s insights, like My Virtual Estimator.

Bottom Line:

Accurate cost estimation ensures the success of construction projects. However, various methods exist for calculating the costs associated with these projects. The rule of thumb is often used to estimate a project’s cost during its early stages, typically when detailed information is lacking. Nonetheless, it helps the estimator accurately determine the project cost and make more informed decisions. 

My Virtual Estimator is one of the leading construction cost estimation service providers in New York City. With over a decade of experience in the NYC cost estimation landscape, they are the best choice. If you are looking for precise and affordable construction cost estimation, you should call them immediately. Moreover, if you want to learn about the rule of thumb and other cost estimation procedures, they are just a call away!