Why Do You Need Preliminary Estimate For Construction Cost?

An estimate of construction cost provides the backbone for the construction budget and bids. It is a basic requirement for owners or stakeholders. They can get an idea about the amount of financing to turn the project into reality. Therefore, a detailed and rough estimate is a choice among them to source the financing and study the feasibility. Moreover, the contractor’s profit, and owner satisfaction also depend upon the completion of the project within the construction cost. But there are many types of construction costs and preliminary estimating is the best one to deal with this situation.

Many solutions are available for the potential issues once you have budget and cost estimates before the construction. A successful project always relies on a preliminary estimate as it creates a roadmap for the project. In this article, we will explore preliminary estimating so that you are able to appreciate its importance, and usage, and know how to get one.

What is Preliminary Estimating?

The preliminary estimate is usually an estimate that is performed before the design and plans have been completed. It is also known by other names such as abstract cost estimate, approximate cost, or budget estimate. Moreover, it is in the initial stage so that stakeholders can deduce the financing requirement from it.
Preliminary estimating involves the preparation of construction costs with reference to some previous project. Additionally, each work item is available with its importance and utility. This item includes the cost of site works, land, roads, electrification, MEP, and building. For example, a contractor can perform a preliminary estimate to save the time of the owner by presenting the estimate from his past projects of the same size. Certainly, the cost revision will be available before actual construction begins but at this stage, clients can decide whether they can afford it or not.

Importance & Role of Preliminary Estimating

The importance of preliminary estimating is obvious since it saves a lot of time and assists in planning and design. Moreover, it can:

  • Set a baseline for project scope, budget, and timeline. Certainly, it will help clients to understand the feasibility.
  • Identify issues early in the project to develop solutions and reduce costly errors and time wastage. Moreover, it will help to deliver the project successfully.
  • Guide to making decisions early to avoid potential conflict and mitigate risks.
  • Refer to feasibility studies so that clients can re-design and implement the project as per decisions.
  • Align the project with goals and overall objectives. Moreover, this ensures final outcome and client satisfaction are met.

Additionally, there are many reasons to have preliminary estimating in project planning. But the following are common and key roles it plays:

1. Create a Baseline

A preliminary estimate provides a baseline in terms of project scope, budget, and timeline. Moreover, it helps stakeholders to understand the project.

2. Determine Issues

Developers, stakeholders, and others can develop solutions and strategies to mitigate risks once they know about potential issues. This is achievable through a preliminary estimate.

3. Assist in Early Decision Making

A lot of time and money savings later in the project are achievable by avoiding costly errors. Early decisions are able to make the right decision through preliminary estimates.

4. Resources Allocation

Another role it plays is in resource allocation where stakeholders are able to provide resources effectively. It includes staff, materials, labor, equipment, and other requirements for work.

5. Assist in Communication

A preliminary estimate plays a crucial role in developing a common understanding among stakeholders in the project. This ensures that all are on the same page to avoid conflict.

Importance & Role of Preliminary Estimating

Step By Step Guide To Perform Preliminary Estimating

Here are steps to follow to perform a preliminary estimate:

1. Define Scope

The first step is to define the project scope. It includes work deliverables, timelines, and objectives. You can use this scope to perform estimations for costs and resources later.

Tip: Modern tools such as software and industry-standard digital solutions are always quick and accurate. It is suggested to use them to compete in the market.

2. Review Data

Past projects of similar nature and size are able to provide data and insights about resources and cost requirements. Cost and quantity requirements are easy to obtain from past data.

3. Work on Industry Standards

Accurate estimate follows the industry standards and practices which are crucial. It can provide guidance for costs and resources in the estimate for the project.

4. Market Trends

Market trends are crucial for your estimates. The cost and availability of resources such as materials, labor, and equipment impact the estimate. You must take into account the marketing conditions and trends.

5. Determine Project Constraints

Time, budget, or regulatory requirements also put constraints that can impact the entire project. Therefore, you must plan ahead regarding the project constraints in your estimate by identifying them.

6. Add Contingency Plan

Unseen risks can change the project scope and your estimate must identify and set aside an amount for contingency.

Examples of Preliminary Estimates

Here are a few examples of preliminary estimates:

1. New Construction

For new construction, you require the cost of labor, materials, and equipment to build the structure. Here the preliminary estimate is necessary and should include these costs. Moreover, foundation, framing, electrical, plumbing, HVAC, floor, fixture, and other costs are also part of your estimate.

2.Remodeling Projects

Preliminary estimates are also important for any project involving amendments, remodeling, or renovation. Here we can use an estimate to know the costs for demolishing or changing the structure, MEP upgrading, and finishing.

3. Public Infrastructure

Public infrastructure projects are very crucial and require proper costs for materials, labor, maintenance, and equipment. For example, road construction requires estimates for gutters, sidewalks, drainage, paving, and grading. On the other hand, bridge construction also requires an estimate for roadways, substructures, foundations, and other structures.

4. Site Development

Site development is an important project and requires a proper preliminary estimate for costs related to labor, materials, and equipment for grading, soil, stabilization, irrigation, hardscape, and pathways.

What is a preliminary estimate of construction cost?


Preliminary estimating is crucial for the success of the project as well as saving time, costs, and effort. Moreover, it plays an important role in enhancing communication among stakeholders and providing information related to project costs. This helps stakeholders to determine project costs, feasibility, and financing and develop strategies for mitigating risks and contingencies. Buildings, remodelings, roads, bridges, and other structures always require a preliminary estimate for work. Finally, accurate and quick preliminary estimates save a lot of effort and time and ensure the project estimates work.

Contact us right now to save money and time by getting a realistic estimate of your project for taking the next step. Seasoned professionals and affordable services are just a call away.


What is a preliminary estimate of construction cost?

The preliminary estimate of the construction cost is an estimate before the actual construction begins. It is for the purpose of financing and different stakeholders use it for their requirements. Moreover, it is based on limited or partial data.

Why is a preliminary estimate important?

Preliminary estimations prevent costly errors, reduce risks, and assist in planning.

Who prepares a preliminary estimate?

Contractors, builders, and other stakeholders prepare preliminary estimations. They transfer it to clients and owners for decisions regarding feasibility and financing.

What factors are considered in a preliminary estimate?

There are several factors such as scope, past and historical data of same-size projects, standards, market trends, and constraints for this estimation.

How accurate is a preliminary estimate?

Accuracy is important in any preliminary or other estimations. This type of estimate is good enough before actual construction begins and revision of the costs is important before construction begins.

Can a preliminary estimate change during the project?

Preliminary estimating can change during the project once more and more information and data is available. Moreover, significant revisions are a must for such an estimate.

How can I ensure the accuracy of a preliminary estimate?

There are many tips and methods to achieve accuracy in your estimates. It includes using the latest tools, guides, and software to quickly and accurately perform the duty.

What are common challenges in preparing a preliminary estimate?

Construction is a complex activity and includes many tasks. Therefore, estimations work best when they have proper data, clear requirements, and a plan for contingency and extra resources.

Can a preliminary estimate be used for budgeting purposes?

One of the purposes of the preliminary estimate is that they help and assist in issuing budgets but again they are limited to available data.

How does a preliminary estimate differ from a final construction cost?

The final construction cost varies from the preliminary estimations since it ballpark figure of the project cost and not the final cost.