As a contractor, your project’s success lies in how accurate your estimates are. Whether you use a bunch of papers or create estimates online, you need to ensure every detail is correct. This is because firstly your clients will ask for estimates to finalize the project deal. They may not consider you if your estimates are poorly written. Therefore, you must learn how to estimate construction jobs correctly.

We understand how difficult it is to answer your clients when discussing the project scope and budget. You either need to be smart enough to make a good deal or use online construction estimates to get instant approval from clients.

Nowadays, issuing online estimates has become the preferred choice for most contractors and project managers because it helps them lock in deals without any extra effort. Anyways, if you are new to the construction industry, let us guide you on how to estimate a construction job in detail.

What Is Construction Estimating?

Construction estimating refers to determining how much cost will be incurred for a construction project and at what time the construction work will be completed. Independent contractors or construction business owners create it in order to gauge the material’s requirement and set the budget plan.

Initially, it may require in-depth research on materials’ availability, laborers’ requirements, and any other expenses. A professional and polished estimate for construction offers a clear view of the project’s scope and the cost associated with it.

Estimating construction work is not only important for contractors or owners but also for their clients who want a basic idea of the project timeline and estimated cost. With perfectly made estimates, construction engineers can know whom to hire and what should be prioritized in the construction work. Whereas, clients can learn about project costs and finalize whether to move ahead or not.

Why are Accurate Estimates Important?

Why are Accurate Estimates Important

When you make professional estimates accurately, it leaves a lasting impression on clients and offers a clear view of the project scope and estimated budget. Here are a few more benefits of sending accurate estimates.

Closes the Deal Easily

Clean and error-free estimates are likely to get converted into invoices faster. It provides the estimated amount to complete the construction work and other requirements. So, if clients have any doubts regarding project work, then they can contact you and clear them in no time.

Therefore, it is a simpler and faster way of obtaining clients’ approval without conducting repetitive meetings.

Fewer Unwanted Surprises

It goes without saying that your construction project will incur unexpected costs at some stages.
Some clients may not have any issues, but others might consider this an unprofessional act.

However, such things can be significantly reduced by generating an accurate construction estimate. When you present a crystal clear estimate, neither it disappoints construction clients nor it hampers your professional image.

More Work Opportunities

When everything goes according to the estimate, clients are likely to praise your honesty and timely services. This indicates that they are satisfied with the construction work you have done and might be ready to offer more projects in the near future.

Not only that, clients may even refer your name to their friends and acquaintances. Hence, this positive word of mouth can surely land you some more construction jobs, increasing your credibility and profits.

Make Professional Estimates That Win Jobs

Consider Moon Invoice for generating accurate estimates to receive faster approvals and foster healthy relationships.

Create Estimates Now

How to Estimate Construction Jobs: 7 Steps to Follow

How to Estimate Construction Jobs 7 Steps to Follow

Head below to learn how to write an estimate for a construction job using 7 steps.

1. Visit a Project Site

Contractors should visit a construction site to gauge the project scope and learn about site conditions, which can play a vital role in estimating costs. Performing a visit can help you prepare an accurate estimate rather than relying on guesswork or information provided by subcontractors.

When approaching for a pre-check, you can jot down onsite factors or capture a few photographs to inspect the site thoroughly. At this point, you must familiarize yourself with the construction area by asking questions like:

  • Is the land accessible for my laborers?
  • Is there any requirement for special equipment?
  • If the existing structure need to be removed completely?
  • Will construction vehicles be able to reach the spot?

So, once you have answers to these questions, it will be easier to get off the right start following the client’s approval.

2. Submit a Bid

Next, estimators need to submit a bid after assessing the construction site. You need to prepare a bid containing project details in such a way that it should maintain transparency between both contractors and hiring parties. If required you can even have physical meetings with clients so that you can address their concerns.

It is completely fine to take your time while preparing a construction bid because later on, you are the one who needs to finish all the work as promised in the bid package.

Now before submitting a bid, ask specialty contractors to review it once to make sure everything is in place. This is because you must take care of mechanical, electrical, and plumbing (MEP) requirements. If not, MEP is likely to affect your construction work.

3. Invest in Estimating Software

Alright, you must be ready with project details and estimated costs. Now all you need is robust estimating software like Moon Invoice that can generate estimates for your construction jobs within seconds. Explore construction estimate templates on the Moon Invoice, which neither requires designing and formatting nor you need any manual calculation.

Simply populate the necessary details of your construction project and save it for future use. You can download an estimate template in any format like MS Word, MS Excel, PDF, or Google Docs and perform edits whenever required or in case you want to send it later.

This is an efficient way to carry out your estimating task. With estimating software, you can create a professional estimate that actually impresses clients and has more chances of converting into an invoice. No matter which estimating software you choose, we recommend asking for a demo to know if it really fulfills your requirements.

4. Identify Labor Requirements

While assessing the construction land you must have collected basic information that can be used to further determine labor requirements. So, take a deep dive to find how many laborers need to be called up for a project and estimated hours to get the job done.

This could be a tedious process but you should ensure the team performs at the optimal level and achieve the given deadline.

Apart from requirements, another important factor is the direct costs like labor costs and material costs which can pose financial challenges to your company. Labeled as an indirect cost, you must consider laborers’ skills, experience and time while calculating the cost for each individual.

By calculating the cost separately, you will also get the exact idea of how many laborers are required for your construction project. Such details can significantly contribute to your construction estimate.

5. Obtain Liability Insurance

Contractors or project managers must apply for general liability insurance to mitigate any risk factors. It comes in handy as full insurance cover will protect you from accidental damages or injuries to laborers at the job site. Also, you must obtain insurance coverage for tools and equipment used in the project.

Some companies also apply for pollution liability insurance to safeguard themselves from third parties claiming increased pollution due to construction activities.

Whereas, others may also apply for commercial auto insurance and builder’s risk coverage. Likewise, you must choose insurance coverage according to the size and scope of your project.

Once you have purchased the liability insurance, the amount can be then showcased in the estimate.

6. Add Markup to Estimate

Upon the client’s approval, you want to finish the project and earn maximum profits, right? But how will you achieve it if there is no markup value? Markup is the additional amount whatever you decide to include in the unit costs and you don’t necessarily need to disclose it to your clients.

You can say it’s a behind-the-scenes process where you combine the unit cost and additional cost (markup value) in order to make a profit.

Now, the question is how will you do? Simply follow this formula when you want to incorporate a markup cost in the estimate.

Markup Formula

For instance, suppose if your selling price is $570 and the unit cost is $380, then the markup value is 50% (570-380/380*100). As a result, a 50% markup is what you can add to the unit cost to generate profits.

Notably, you can not keep markup too low because it may not result in the desired profit. Also, not too high because clients may not agree to avail of your services.

7. Share an Estimate

Lastly, when you have reviewed the construction estimate and are ready to present it to clients, always choose the right time. Ask for their availability so that you can hand over a hard copy of the estimate and get approval straightaway. Or else, if you don’t have extra time, edit the estimate template downloaded from Moon Invoice and quickly send it via WhatsApp or Email.

Nowadays most contractors are taking advantage of a faster and more efficient way to generate and share estimates through software like Moon Invoice.

Whether it is a rough estimate, preliminary estimate, or final estimate, Moon Invoice has well-designed estimate templates for all your construction works. It allows you to quickly prepare an error-free estimate so that you can present it to clients without asking them to wait.

This automated estimating process ensures faster approval and timely payments, helping you unlock more business opportunities.

Best Practices for Estimating Construction Jobs

Since not every estimate goes as planned, you can adopt more effective ways to predict accurate finances for construction projects. Let us look at how to price contractor jobs through construction estimates.

1. Unit Cost Method

If you go with this method, then every time you need to use a mathematical formula to estimate the budget. Basically, its number of units multiplied by cost, which determines the project cost. This method can be accurate but might take a lot of time to create estimates.

2. Stick Estimation

Stick estimation breaks down the project into individual material units and calculates the cost of each unit separately. Like the unit cost method, it is highly accurate for making estimates but can’t say how long it will take. It is used by contractors when they have short-term construction projects.

3. Online Estimate Generator

If the above two methods consume more time, you can utilize this innovative estimating solution to create online estimates. You neither have to worry about errors nor spend much time. You can create an error-free estimate in mere seconds. You can choose readymade estimate templates with the free online estimate generator from Moon Invoice, and get it ready in a few minutes.

4. Consult Experts

If creating an estimate for the first time seems difficult, then seeking an expert’s help is one of the best practices. You can ask industry experts to guide you to the right path because they understand some aspects clearly and in fact more than you. So, never hesitate to consult experts to get started with your estimating work.


Construction estimates have the ability to offer financial projections to project managers and prospective clients as well. It’s all about how well you estimate construction costs because they can’t be neglected when you have bigger goals.

You should be good at providing a detailed view of a project that can help you stand out from others. Here, we understand how to estimate your construction jobs through this blog, which will allow you to serve more clients and accomplish your construction business goals.

However, if you are concerned about long-term growth, then choosing the right estimate software can be worthwhile. Of course, we are promoting Moon Invoice here because you can’t simply rely on ordinary tools to win clients and achieve the desired success. Especially when you are new to the construction industry.

Check how making construction estimates takes only a couple of minutes by availing of a 7-day free trial.


Jayanti Katariya
Jayanti Katariya About the author

Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.