When considering a new construction project, you often hear the terms conceptual estimates and cost estimates. If you are exploring these terms and services for the first time, here is an explanation of each. What advantages can you leverage by exploring conceptual estimates first? Can this step bring more value and efficiency to your project? Here’s what you need to know about conceptual estimates and their benefits to your new construction journey.
In Construction, What Is a Conceptual Estimate?
A conceptual estimate is a preliminary estimate of potential costs. But they aren’t simply guesses and are usually rooted in complex calculations based on the details you provide your contracting partners. These costs aren’t necessarily fixed because they’re determined earlier in the design phase. As the name implies, the method of conceptual estimation takes place in the pre-construction stage of a project. Getting a conceptual estimate has more than its fair share of cost-saving and project efficiency benefits. According to some data, 70 to 80 percent of the total life-cycle costs are determined by design decisions made early in the building project process. If you want more control of your construction project, the conceptual estimate is mission-critical. You don’t want to head into any new construction without knowing the essential costs behind the design, engineering, and building.
The Difference Between Cost and Conceptual Estimates
A cost estimate will typically reflect actual fixed costs for materials, labor, and time. The conceptual estimate is based on market fluctuations; therefore, predicting costs further into the project timeline and comparing similar projects. If your construction design is more complex, these concept estimates will help you plan for budgets, timing, and potential expenditures.
What Conceptual Estimates Are Used in Construction Projects
The most obvious benefit of a conceptual estimate is the general perspective of how much your new construction project will cost. With it, you can make financial and design decisions that will impact the functionality and style of the final product.
Consider the conceptual estimate as your analysis tool to better predict and understand confirmed costs as well as costs that may present later in the process. This estimation step begins with the designer’s first draft sketches and the starting point in the specs.
The most common estimation methods include top-down, magnitude, and analogous steps. The estimates rely mostly on the scope of work required for the project. The more precise you can be on the scope of work, the more accurate the conceptual estimate will be. However, the overall accuracy of a conceptual estimate can only be determined once the project is officially completed.
Why Conceptual Estimates Are Important to Your Project
The first question you ask before embarking on a construction project is usually, “How much is this going to cost?” With a conceptual estimate in this preliminary phase, you will better understand what budgets will be needed to bring your design to life.
Here is a closer look at other benefits and advantages of securing a conceptual estimate.
Get to know your project professionals. Depending on the scope and nature of your construction project, you’ll likely be working with various teams of contracting professionals. A conceptual estimate will allow you to work and communicate with many of those partners before the build begins. You will have a better understanding of how well you’ll work with these partners and identify any that may not be a good fit.
Explore tailored estimates on current and future plans. The conceptual estimate is designed to outline projected expenses based on various phases of the project. Whether you’re starting with all the design details or not, the conceptual estimate can help you take the next step.
Conceptual estimates can expedite fabricator results. When you have a conceptual estimate in place, fabricators and manufacturers often can deliver more quickly. When everyone knows what your project needs, it’s easier to predict costs and deliver materials.
Leverage the historical and comparison data available. Getting a conceptual estimate, cost history, and comparisons with similar projects can play a significant role. The estimates can be more accurate because price points are based on related expenses for materials, labor, and market trends. Costs are affected by the economy and inflation, so projected expenses could change in a matter of weeks or months. Those datasets allow the conceptual estimate to be flexible and provide you with an accurate budget estimate.
Have a cost analysis tool to help you with your design decisions. Your construction project may begin with a wish list of design elements, amenities, and features. However, the conceptual estimate will ensure your vision aligns with your budget. You can then explore making design changes to keep your must-have features on point with your estimated costs.
Ballpark overall project costs before you agree to break ground or drive the first nail. How often have you heard of new construction project nightmares that involved putting things on hold because of budget constraints or unanticipated design challenges? Save time and money while avoiding similar build pitfalls with a conceptual estimate. Before driving a single nail or digging the first hole, know what your total project will likely cost, along with design capabilities and timeline constraints. Address the challenges before they arise and come up with solutions before the build begins.
Ensure all participants are on the same page. If there are missing elements, the conceptual estimate can ensure that everyone involved in the project is on the same page with your overall vision for completion. Project managers, lead contractors, and stakeholders will all make decisions based on the same-page road map outlined by the conceptual estimate. Each member of the process will have a big-picture understanding and make decisions to maintain timelines, materials, and designs that contribute to the final results.
Yes, the cost estimates are still an important step in the new construction process. However the conceptual estimate will be the best first step for any major project for all of these key reasons. So, when you’re ready to explore your design ideas, work with a professional like Jerdon Construction, where conceptual estimates are part of the process. Connect with our teams to learn more and let us help you bring your new construction project to life, on time, and within your budget.
The best and most effective way to get a realistic and conceptual estimate is to partner with a well-versed team in completing your project. Jerdon Construction has the extensive experience you’re looking for across a wide range of industries, structural designs, and project types. So, no matter what you envision for your project, rest assured that we have the expertise and comprehensive knowledge to set you up for success.
