Reducing the cost of the unexpected costs of a project should be your first goal from the planning stage to the very end. Thinking over the possibilities that your project could go way over a set budget can save you the trouble in the future and set your business image as professional and trustworthy. Making sure that your planning is on point and giving the best out of yourself can sometimes not be enough, though. The human factor can cause errors that will make additional costs, but we have some advice on how to stay alert and what to expect from the most common situations.
Inadequate cost estimation
Due to the competitive nature of the building business and bidding process, some companies might lower the costs so low, that the project is deemed for overrun from day one. A good planning stage can be the most groundbreaking addition to the whole process. With a proper explanation of the initial estimation, you’ll come off as fair and your potential employer will appreciate it way more than finding tons of hidden or unexpected costs in the future. You can make a whole process out of estimating the cost and talk if through with architects and other contractors and search for any concerns and unrealistic timetable.
Incompetent site manager
During the construction phase, there are a lot of elements that the manager must take care of and is accountable for. You have to have the kind of person that can communicate with the client in a way that both sides are happy with it and know what to expect. Poor management of the equipment or the products or maybe poor logistics, such as forgetting part of the products or losing them can boost the growth of estimated cost. Finding trustworthy managers can take some time, but the end result will pay off very quickly!
Nothing of the reasons above will help, if the project design is incomplete or poorly put together. Consider using some project management software that will reduce the costs of the errors or clients new demands by including a clear list of references, specification and real-time changes into the program. It’s much easier and faster to incorporate any adjustments on a dynamic model that to redraw the whole concept by hand.
Overruns in construction projects had become the nightmare and are industry-wide. When you know what to expect from the project, you can foresee the troubles and mistakes and protect yourself against them. By choosing the right estimation and implementing proper behaviour at every stage of the project, you’ll keep the budget and maximise the efficiency as well as your profit.