What is a Cost Estimator?
A cost estimator is the person responsible for providing the total costs and time required to complete potential projects. These estimates are used to complete a cost benefit analysis and identify the potential sales price and profit. The reports provided by the estimator have direct impact on the financial decisions made by the business.
Cost estimators typically work in three different industries: construction, manufacturing and consulting services. Although the details of the roles vary slightly between industries, the main task is the same. They are responsible for collecting and analyzing information related to all aspects of the proposed project and providing an accurate forecast of total project cost and profit margin.
In the construction industry, the estimator is responsible for reviewing the project drawings and specifications in detail. Working closely with the architecture and design team, they learn about the client’s requirements and the proposed design. The next step is to visit the proposed project site.
Every site is different, but the basic needs of water, electricity and other services must be met and incorporated into the project cost. Other factors that must be included are staging space, specialized equipment requirements and climate. These items all influence both timeline, costs, and must be reflected in the total project cost.
A manufacturing cost estimator is a member of the engineering or costing department. Their role is to provide accurate cost estimations to create a product under a variety of scenarios. This task begins with the review of the blueprints or designs. A detailed analysis of the parts required, cost to manufacture and cost to purchase is completed. Assembly, tooling, equipment set up and testing costs are all incorporated into the final report.
The role of cost estimator in a manufacturing setting requires formal post-secondary education in engineering, sciences and planning. Other important skills are attention to detail, accuracy and a wide knowledge of all aspects of the firm. Most estimators also have several years of experience working on the production floor.
A consulting firm generates profit through accurate pricing. Regardless of the actual consulting work being completed, the firm must be able to identify the correct resource, estimate the timeline required and provide an accurate quote to the client. The cost estimator is responsible for reviewing the project specifications, exploring the client environment, and defining the project scope. They create project plans, milestones and allocate time for learning and meetings.
Incorrect estimates cost the company both profit and potential clients. Once a quotation for work has been accepted, the firm is obliged to provide those services at the price provided. If the price it too high, the firm will miss the opportunity for work. If the price is too low, there is no profit and the firm may even lose money on the project.
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