Read this so Your Construction Project Doesn't Derail
When the property market is booming, with new projects around the corner, you want to make sure that you’re making the best use of the opportunity for profit and potential growth. Aside from completing good work, of course, this means managing your costs as best as possible. When they’re planned, tracked, and thoroughly thought through from the beginning, it’s easy for them to balloon out of control. As such, here, we’re going to look at some of the most impactful ways you can reduce the costs of your construction projects, leading to them staying in budget.
Start With A Realistic Budget
First of all, you’re going to need a strong budget, which is going to be based on real quotes, current market prices, and the full scope of the project, not rough guesses. Include obvious costs such as labor, materials, permits, equipment, and design fees, but don’t forget about the less visible expenses such as inspections, site preparation, temporary facilities, waste removal, insurance, and contingency funds. The latter point is one of the most important, as it’s always worth having roughly 10-20% of your budget set aside for dealing with any unexpected issues that might crop up along the way. Avoid the common mistake of setting your budget too low to win bids or make a project feel more affordable, to begin with.
Define Your Scope Clearly
If you don’t have a clear scope for the project, then it’s easy for costs to rise as a result. Before any work starts, at all, then make sure that you’ve properly documented the plans, specifications, finishes, materials, timelines, and the responsibilities of the team members, looping in every contractor and supplier as much as they need to be looped in. This gives you a good idea of what’s included in the project and budget, allowing you to correct anything that’s missing before it becomes an unexpected cost. It also reduces the chances of disputes, duplicated work, and expensive change orders coming along later. A clear scope also makes quotes easier to compare because each contractor is pricing the same work, not interpreting the project differently.
Consider Lifetime Value When Choosing Materials
If you’re the one responsible for the long-term costs of the project, including maintenance and repairs, then you should keep in mind that the cheapest material is not always the most cost-effective. You need to look beyond the initial price and at factors like durability, maintenance, repair needs, and expected lifetime. For instance, by looking at a comparison of asphalt and concrete, it’s easier to see where asphalt is initially cheaper, but concrete’s long-term durability and lower maintenance in some applications might make it the better pick. The best choice depends on usage, traffic, climate, project lifespan, and maintenance expectations, but you should always consider the lifetime costs of a given material or feature.
Choose The Right Contractors
Just like with materials, choosing the cheapest contractors doesn’t mean that you’re going to reduce the costs of the project, if they’re more likely to lead to work being delayed, poorly coordinated, or in need of a redo. Choose contractors based on experience, reliability, relevant project history, financial stability, communication, safety standards, and references. Ask for detailed quotes rather than one-line prices, and make sure that their quotes mention everything that you need to include in your budget, as outlined above. A good contractor is able to clearly lay out every part of their quote and to explain the costs, as well as the risks of the project that could see those costs going up. The right contractor will help control costs through accurate planning, efficient scheduling, strong supplier relationships, and fewer errors.
Treat a Construction Project Like a Job
Even if you’re hiring out the work, this construction project should be treated like your primary job. Pay attention to details, know your budget, don’t go with the lowest bidder, and monitor the progress.
Have you had a construction project go south? What happened?