If you're just starting your journey as an estimator, you’ve probably heard the term “preliminary estimate” tossed around a lot. But what does it really mean—and why is it so important?
Well, think of a preliminary estimate as the foundation of a strong project. It’s your first opportunity to show potential clients that you understand their needs, that you’re thorough, and that you’re someone they can trust. In fact, a well-prepared preliminary estimate can be the difference between landing a job—or watching it go to someone else.
In this post, we’ll walk you through everything you need to know about creating a strong, effective preliminary estimate. From the basics to a step-by-step guide and some helpful tips, this beginner-friendly post will help you unlock the power of a good preliminary estimate—and boost your confidence along the way.
What Is a Preliminary Estimate?
A preliminary estimate is an early approximation of the cost, scope, and timeline of a project—before detailed designs or final plans are available. It gives your client a ballpark figure and helps them decide whether the project is feasible and worth pursuing.
This estimate doesn’t need to be perfect, but it does need to be informed, thoughtful, and professional. It’s your chance to show that you understand the basics of the job and that you’re a reliable partner right from the start.
Step-by-Step Guide to Creating a Good Preliminary Estimate
Step 1: Understand the Project Scope
Before you crunch any numbers, take the time to clearly understand the project. Even if the plans are still in the early stages, get as much information as you can.
Ask questions like:
- What is the general goal of the project?
- Is this new construction, a renovation, or an upgrade?
- What systems or trades are involved (e.g., electrical, plumbing, painting)?
- Are there any site limitations or known challenges?
Even a 15-minute call or site visit can give you valuable context. This understanding forms the basis of your estimate—and shows the client you care.
Step 2: Do a Rough Quantity Takeoff
A “takeoff” is just a fancy word for measuring what materials and labor will be needed. For a preliminary estimate, you don’t need to count every screw—but you do want to outline the big-ticket items.
For example:
- Approximate square footage for flooring or painting
- Linear footage of piping or ductwork
- Number of fixtures, windows, or outlets
Use historical data or previous similar jobs to make educated assumptions if needed. Over time, your takeoffs will get faster and more accurate as you build experience.
Step 3: Apply Unit Costs
Now that you have rough quantities, it’s time to assign unit costs. These are average costs per item, square foot, or linear foot—including materials, labor, and equipment.
Where do you get these numbers?
- Past project data
- Industry estimating guides (like RSMeans)
- Supplier quotes (for materials)
- Subcontractor input
Remember, this is a preliminary estimate. Don’t stress about being exact—but do use reasonable numbers based on your market.
Step 4: Add Overhead and Profit
Next, factor in your overhead and desired profit margin. This is key—because you’re not just estimating the cost of the job, you’re estimating what it will take to run your business and make money.
Common overhead and profit margins:
- 10–15% for overhead
- 10–20% for profit (depending on job size and risk)
Add these percentages after you calculate direct costs. This step ensures your estimate supports a healthy, sustainable business.
Step 5: Add a Contingency Buffer
Since preliminary estimates are based on limited information, it’s smart to include a contingency buffer—usually 5–15%.
This accounts for:
- Design changes
- Market price fluctuations
- Unknown site conditions
Being upfront about this helps you manage expectations and shows your client that you’re realistic—not just trying to lowball the estimate to win the job.
Step 6: Present It Professionally
Once you’ve completed your estimate, package it in a clear, organized, and professional format. Use a simple breakdown of major cost categories (e.g., materials, labor, overhead) and summarize key points.
Even if you’re using a spreadsheet, make sure:
- It’s easy to read
- Totals are clear
- Any assumptions are explained
You’re not just selling a number—you’re selling trust.
Practical Tips for Beginner Estimators
1. Don’t Aim for Perfection—Aim for Progress
Especially when you're starting out, it's easy to feel paralyzed by the fear of getting it wrong. But remember: a preliminary estimate is meant to be an informed guess, not a final bid. Your goal is to be clear, reasonable, and professional—not perfect.
2. Learn from Every Project
Save your estimates—and compare them to actual project costs when the job is done. This is one of the fastest ways to improve your accuracy and confidence.
Ask yourself:
- Where was I spot on?
- Where was I off—and why?
- What should I adjust next time?
3. Use Estimating Tools and Templates
There’s no need to start from scratch every time. Use spreadsheets, estimating software, or even simple templates to streamline your process. Tools like:
- Excel
- Buildertrend
- Stack
- CoConstruct
These can save you hours and reduce costly mistakes.
4. Talk to Your Team
If you’re working with tradespeople, foremen, or subcontractors, ask for their input. They may point out things you didn’t consider—like access issues or specialized equipment needs. Estimating is a team sport, especially in the early stages.
Why Good Preliminary Estimates Matter
Here’s what a strong preliminary estimate can do for you:
- ?️ Set the tone for a professional client relationship
- ? Open conversations about scope, budget, and feasibility
- ? Position you to win more bids—especially when you're seen as thoughtful and realistic
- ? Build your reputation as a reliable estimator
And perhaps most importantly—it helps you. Each estimate you complete builds your confidence, skills, and value in the marketplace.
Conclusion:
A good preliminary estimate is more than just numbers on a page—it’s your first handshake with a project. It’s where trust begins, and where opportunities are born.
As a beginner estimator, the most important thing you can do is start. Use the steps in this guide to walk through your next estimate, learn from the process, and keep improving with every project.
