Cost Estimate

In business, a cost estimate is the approximation of the probable costs of a product, program, or project. A cost estimate is typically the first step in the budgeting process. Cost estimates are used to bid on projects, secure funding, and provide financial guidance for decision making.

There are several different types of cost estimates, including:

-Budget Estimates: Budget estimates are created during the planning phase of a project and outline the expected costs of all project activities.

-Preliminary Cost Estimates: Preliminary cost estimates are created early in the project lifecycle before detailed information is available. These estimates are based on estimators’ experience and knowledge of similar projects.

-Detailed Cost Estimates: Detailed cost estimates are created once more information about the project is available and include all known costs associated with completing the project.

-Final Cost Estimates: Final cost estimates are created after all work has been completed and may be used to compare actual costs to estimated costs.