Early cost estimation is one of the most critical management functions in the initiation and planning stages of a construction project. It sets the foundation for the budget, financing strategy, design decisions, and project feasibility.

Why Early Estimates Matter

• Provides the first financial picture of a project before design is finalized.
• Enables go/no-go decisions by owners and investors.
• Helps compare alternative design concepts and materials.
• Guides budget allocation for design, procurement, and construction.
• Detects financial risks early and allows proactive planning.

Consequences of Poor Early Estimation

• Unrealistic budgets leading to funding shortfalls.
• Frequent design changes and scope revisions.
• Owner dissatisfaction and contractor disputes.
• Cost overruns and project delays.

Key Idea:

The accuracy of an early estimate determines the credibility of the entire project plan.