Operating a business within the construction industry can definitely have it’s rewards, but it isn’t without it’s challenges either. One particular challenge that we’re going to highlight in this blog is how arduous project budgets can be, especially when you take into account just how tight margins within this industry are.
Check out our top six tips to help you cut project costs and stay on budget below:
#1: Get your estimates right at the start
Starting work on a project and then realising that mistakes have been made on your estimate can be both annoying and very costly for businesses. Such mistakes can become expensive if work must be completed again, as this will double labour costs and could also double material costs. Therefore, it’s so important to make sure that your estimates are accurate during the planning stage of your project.
You may be wondering how on earth you can ensure your estimates are accurate? Don’t worry, we’ve got the solution for you. RapidQuote’s take-off and estimating software can significantly reduce the probability of human errors by building a digital list of materials required and automatically calculating costs and margins for you.
Additionally, we’re confident you’ll save a significant amount of time by making the switch from manual processes to our software tools. Why are we so confident? Well, our existing clients have reported working up to 80% faster since making the switch, which in turn has enabled them to submit more tenders than they could before.
#2: Identify risk factors
As with anything in life, things are bound to go wrong at some point during construction projects and such unforeseen circumstances can be very pricey to put right if you’re not prepared. While it is impossible to be aware of everything that will go wrong ahead of time, there are steps you can take to help safeguard your business.
Prior to starting work on your project, it’s important to identify potential risks that could cause issues throughout the project. This will give you an opportunity to mitigate the financial ramifications of such risks by assigning some additional time or budget allowance.
#3: Maintain communication levels
It doesn’t matter what stage of your project you’re in, ensuring communication is clear throughout is extremely important. If there is a lack of communication during the project, a variety of issues can occur that could have a significant impact on your budget.
During the pre-build phase, it’s vital that everybody is notified if the drawings are updated and that everybody is working off the latest version. This is particularly important across multiple trades as working from different drawings can lead to conflicts with both trades planning to use the same space. It’s important to resolve this before work starts, as such conflicts will likely be expensive if additional work or materials are required to resolve the conflicts.
Maintaining a high level of communication can also be handy when obtaining the required materials for your project, as at this stage you have an opportunity to establish working relationships with your suppliers. Such relationships often allow you to negotiate the best possible rates for materials as suppliers will want repeat business from you in the future.
#4: Employ staff that are multi-disciplined
During your recruitment process, search for staff that are capable and willing to carry out multiple job roles confidently. This will enable your business to complete more tasks without the requirement for additional staff.
This will likely increase the amount of time your recruitment process will take, but once you’ve built a team of staff members that are fully qualified and comfortable multitasking it will be worth it. This is because staff with this work ethic and level of experience are priceless and will help your business to save both time and money.
#5: Review your operations processes
We appreciate that when you’re thinking about cutting costs on your project, your operations policies and processes don’t exactly spring to mind as an area to cut back. However, you might be surprised at how much money you could save by keeping a closer eye on your processes.
Tool servicing processes and budget control
We’re not going to pretend that replacing tools isn’t easier or quicker than having them serviced, but this could be a key area where you can cut costs, particularly if you’re replacing tools when you don’t need to. You could save significantly by assessing if having tools serviced will get them working correctly again before opting for a replacement. Tools breaking could also be due to negligence, particularly if they have not been serviced at the recommended intervals or when they have seemed slower than usual, as over time this would likely cause your tools to break.
Of course, servicing instead of replacing tools will not always be a viable option and there will be instances when you have to replace them. You should set a budget specifically for tool replacements. To make sure tools are only being replaced when they absolutely should be, you could introduce a controlled budget that is monitored closely, as this will help you to minimise cost on replacements.
Enforce processes to track materials
All construction businesses will have a set number of tools available to be used by it’s employees who are likely to be working across multiple construction sites at any given time. Having so many employees that are field-based most of the time can unfortunately present some difficulties when it comes to keeping track of all tools and materials that are owned by the business and some tools could even go missing. Subsequently, not keeping track of tools could cause employees to be unable to access tools that they require which can lead to delays in ongoing projects.
Tools going missing can happen due to a couple of reasons; employees may not have completed the required paperwork to sign out a tool from the warehouse or employees may hold onto tools in between jobs. Not completing the required paperwork when taking tools from the warehouse can cause a real problem for your business, as this process enables you to keep a written log of when tools have been signed out and who has signed them out. Employees could be motivated to retain materials between jobs if they have struggled to get hold of them before or if they know they will need those specific tools for an upcoming project they are working on.
Enforcing processes that are in place to track your tools and ensuring all colleagues are completing the necessary paperwork will help you to significantly reduce costs. This is because tools going missing can become expensive in multiple ways. Firstly, you will have to pay out for replacement tools if you cannot locate them and there will also be productivity losses within the business whilst you’re spending time finding or replacing missing tools as employees will be unable to carry out tasks without the tools they need.
#6: Effective time management
Deadlines are extremely important when it comes to any project, this is because they are the date agreed with your client that the project will be completed by, so meeting them is key to your business’ success. While you might be tempted to forget about the deadline until it’s imminent, keeping to your project timeline as closely as possible over the course of the whole project is the best course of action, this is because any delays can contribute to the project overrunning.
Poor time management can have serious ramifications for your business both in the short and long term. Should you fail to meet your deadline, there will be the financial consequences of having to pay for any additional labour and materials that are required. It is very unlikely that you will never have any of your projects overrun, however you can reduce the likelihood by keeping a close eye on the time management of each project. Long term this is best for your business, as if you consecutively fail to meet multiple deadlines this will give your business a bad reputation within the industry and will likely result in you winning less work in the future.
Want to start reducing your project costs right away? You’re in the right place! Find more details on how RapidQuote’s software tools can save you both time and money here or get in touch with our team directly. If you would like to see our software in action at a date and time that suits you, you can book a guided demonstration for free here.