Effective construction cost management is crucial for completing projects on time, within budget, and to the required quality. However, balancing the need for quality with cost control can be challenging. With these five strategies, you can take a few steps to ensure your project stays within budget.
1. Develop a Detailed Project Plan
A detailed project plan is essential for managing construction costs. It can help accomplish several goals, including:
Establishing a roadmap for the project
Identifying critical milestones
Keeping everyone on track.
When developing your project plan, consider all the resources and timelines required. Planning upfront can help you stay on track and avoid any unexpected expenses.
2. Conduct a Thorough Site Analysis
Conducting a thorough site analysis before construction can help identify potential challenges and limitations that could impact the project’s costs. For example, if there are existing underground utilities that need to be relocated, this construction effort could start to rack up surprise expenses. You can plan accordingly and minimize unexpected costs by identifying potential challenges early.
3. Hire a Reliable Contractor
Selecting a reliable contractor is crucial for managing construction costs. A good contractor has a reputation for managing costs effectively and can provide you with accurate estimates, negotiate with suppliers, and find cost-effective solutions. You should look for a contractor with a proven track record, references, and a portfolio of completed projects.
Managing resources effectively is critical to minimizing construction costs. Overstaffing can lead to unnecessary labor costs, while underutilizing equipment can lead to longer project durations and increased costs.
5. Embrace Technology
Technology is revolutionizing the construction industry, and construction companies can use technology to manage costs effectively. For instance, project management software can help you keep track of expenses and avoid overspending. Building Information Modeling (BIM) can also help you detect potential cost overruns early.
Bonus tip: Plan for Contingencies
Construction projects can often encounter unexpected events that drive up costs. It is crucial to plan for contingencies to minimize their impact on the project’s cost. For example, you can allocate a contingency fund to address unforeseen events or include a schedule buffer to deal with schedule delays.
Managing construction costs requires careful planning and execution. By following these strategies, you can effectively manage construction costs and ensure your project stays on budget.
Choosing the right construction company for your next project is crucial. While you might be drawn to larger companies, local general contractors can provide individualized attention, so you avoid costly problems and delays that waste your time and money. By taking advantage of a local company’s benefits, you ensure a successful construction project that meets your needs and exceeds your expectations.
Here are a few key advantages:
Knowledge of local building codes and regulations
Local construction companies often have a better understanding of the specific requirements and procedures of building codes and regulations in their area. Equipped with more experience and established relationships with local building officials, permit offices, and regulatory bodies that oversee construction projects, you can avoid mistakes that waste time and money.
Pre-existing relationships with local suppliers and contractors
A key task of general contractors is to hire subcontractors and specialists including plumbers, electricians, roofers, and more. You want to avoid any company that will opt to hire the first available or cheapest option, resulting in sub-par work that may need repairs in the future. A local construction company is more familiar with which local subcontractors produce high-quality work, saving you time and money in the long run.
Faster response time & easier to contact
It is much easier and more efficient to discuss project details face-to-face rather than via email or phone call. In-person discussions are often unlikely or complicated to set up with large companies unless you want to travel long distances. However, when working with a local construction company, they go the extra mile to accommodate you and work through problems quickly and efficiently. This accessibility provides peace of mind, avoids the frustration of miscommunication, and streamlines your project.
Greater accountability
A local contractor’s business is built largely on its reputation. If they don’t consistently deliver quality work on time and within budget, they won’t get hired. This pressure from the community holds local construction companies accountable for everything they do—from how they treat subcontractors to aligning with building codes and regulations.
Growing the local economy
Working with a local construction company keeps money within the community. Employees are hired locally, which creates jobs and develops deeper community ties. More tax money goes to local infrastructure and supports the development of your community.
Local references
With a larger, out-of-town company, you can look at reviews online or past projects, but you might miss being able to look at example projects firsthand. With a local construction company, you can see a contractor’s work in person, talk with previous customers, and evaluate the company before hiring them.
Working locally offers numerous advantages that can benefit both the customer and the community. If you’re looking for high-quality, reliable construction services that are tailored to the specific needs and conditions of the area, reach out to your local construction companies.
What does it take to transform your designs from ideas to reality? Learn more about our construction process and how we see projects through from concept to completion.
Commercial construction projects can be overwhelming if you don’t know what to expect. But have no fear – to make it easier, we’ve broken it down into 4 phases and included the key questions that you should be asking yourself and your builder.
Phase 1: Development and Design
The first phase, Development and Design, includes the acquisitions, feasibility studies, regulatory approvals, and planning required for a successful construction project.
Before you begin, prepare yourself: the first phase of construction projects is time-consuming. It will require patience. Even experienced professionals know nothing moves quickly in the development and design phase. To make it easier, start integrating key parties now, including the architects, engineers, contractors, and consultants.
While the prepping may seem endless and you’re antsy to start your new project, dedicating resources to proper design and development can make or break a project. The industry is unpredictable, and projects fail all the time because of hastily made plans, shaky financing, or sudden market changes for which you were unprepared.
Phase 1 Check-In:
How does your building meet the needs of your market?
How can you prepare for adverse conditions?
Who exactly needs to be involved in the overall process? Are they involved at this point?
Phase 2: Pre-Construction
In the Pre-construction phase, you can get ahead of potential issues, including permitting and material acquisition delays, which are the two most common problems in construction projects.
The process for getting a construction permit approved is commonly misunderstood. Even if all your paperwork is perfect because you put in the time beforehand to get your ducks in a row, there is a huge volume of requests being processed through multiple approving departments. Permitting offices are typically understaffed and overworked, adding to the delays. Be patient and be organized as you go through this process.
Acquiring the right materials for your dream office, retail space, school, or industrial warehouse takes time, especially if there are any supply chain delays. Construction project materials may have unexpectedly long lead times. Knowing and avoiding those lead times now can keep your project on schedule and on-budget.
To avoid permitting and material delays, lean on your architect and builder. As part of your commercial construction team, they can leverage their expertise and experience in handling these complex processes and proactively manage predictable challenges.
Phase 2 Check-In:
What supplies might have long lead times to procure?
How can you plan around delays and prepare in advance?
How can you make permitting easier?
Phase 3: Construction
In well-managed and well-planned construction projects, the actual construction part doesn’t start until you’re at least 2 phases into the project. Once all the materials, team members, permitting, approvals, and planning are in place, Construction can officially start in phase 3.
However, enter phase 3 knowing that even the best plans encounter unforeseen, uncontrollable circumstances. Whether it’s the weather, adverse site conditions, acts of God, or any other unpredictable event, there are a hundred different things that can happen that threaten to derail a project. Great construction management identifies potential pain points upfront and has plans to mitigate them, so unforeseen events are easier to manage when they happen.
Phase 3 Check-In:
How can I plan ahead for unforeseen circumstances?
Is my builder prepared for potential obstacles in the project?
Phase 4: Wrap Up
After construction is complete, the final phase, Wrap Up, will officially complete your project. In this phase, you should expect a final walkthrough and guidance from your builder to facilitate a smooth move-in. Before you settle in and begin to enjoy your new building, make sure all loose ends are tied up and the building is good to go.
Phase 4 Check-In:
What final details do I need to coordinate?
What are the final steps before move in?
What protocols are in place to ensure a safe transition?
In all stages of the construction process, always remember that involving your key stakeholders, including your architect, engineer, general contractor, subcontractors, and consultants can be your key to success.
We can help facilitate the connections and resources you need to get your project done on time and on budget. If you have questions or want to know more about what to expect for your next commercial construction project, connect with us.
There is no shortage of available general contractors, but the key is finding a great partner for your commercial construction project.
However, judging the good from the bad and the ugly can be challenging, especially when you’re not a construction expert.
That’s why we’re providing a comprehensive criteria sheet for judging and selecting a contractor. This guide will provide you with a matrix for easier decision-making as well as the key questions you can ask in your contractor interviews.
Save the resource below for an easier time selecting the contractor that’s right for you.
Contact us if you have any questions about selecting a contractor for your next project.
