Construction projects can be expensive, which is why it is important to look for ways to cut down on costs wherever possible. To reduce expenditure without compromising on the quality of a project, find out how streamlining can help to cut construction costs.
Estimate Construction Costs
Start by accurately estimate the cost of the project prior to building work, which can prevent significant financial surprises or costly mistakes. Walk through the process step by step to ensure you consider every form of expenditure, such as employee salaries, the price of materials and the cost of machinery and tools. You can even utilize estimation software to identify the specific needs of the business.
Introduce New Technologies
New technologies have the potential to save a company a considerable amount of money, as they can monitor practices and procedures while streamlining project processes. There are also tools available to reduce the reporting or compilation of information, such as cloud computing, so your team can spend more time onsite rather than behind a desk.
Don’t spend a significant amount of money on a product or service if you don’t have to. Many construction companies make the big mistake of renting brand new equipment, but it can often be much cheaper to rent equipment. For example, this company enables construction companies to either rent their survey equipment or buy more affordable used products, which can cater to their surveying needs.
Identify Potential Risks
Every construction project will come with an element of risk. Materials won’t arrive on time, employees could experience an accident or injury onsite, or there could be delays with the building work, which could each cost the business a substantial amount of money. Save yourself both time and money by identifying potential risks that could impact a deadline and the company’s finances. By analyzing the risks associated with a project, you can identify potential solutions to quickly and affordably recover.
Develop Long-Term Relationships with Suppliers
Save a considerable amount of money by developing long-term relationships with both suppliers and contractors. Businesses will want your repeat custom, so they will more than likely be willing to negotiate on the prices of their products and services, or could improve their deadlines to help save your company money. Almost every supplier or contractor will be happy to renegotiate if they know there is a scope for future custom, no matter how tight their margins might be. So, cut your overheads by negotiating the best possible rate with a supplier, and aim to nurture the relationship through mutual respect, trust and industry recommendations.
A lack of materials management can slow a construction project down. For example, asset managers could be spending many hours onsite looking for tools, while your employees could be waiting for the right tool to complete a specific task onsite. It is therefore important to introduce accountability, so employees know who is responsible for select machinery and tools.
There must also be processes put in place to ensure field employees keep up with their paperwork, and that employees do not deliberately or unknowingly take tools home with them, which could quickly eat away at a company’s finances. By learning where the tools are at all times, and who is responsible for their safekeeping, you can create a more productive team that will ensure you meet every deadline.
Hire a Multitask Workforce
When hiring construction staff, look for employees who offer multiple skills, so that they can execute more than one task onsite. Increased versatility will result in optimal productivity, which can save you money on employee salaries while creating a more successful project. Once you have found the right team, aim to build a relationship built on mutual respect to retain both their loyalty and talent.
Communication is key to every successful construction project. You should take the time to listen to contractors or architects and try to keep an open mind. Avoid responding to questions with more questions, and provide the clear answers they need so people will understand what needs to be done, which can prevent the stalling of a project.
Review Vehicle Costs
Many construction firms depend on large vehicles to transport their materials from A to B. Reduce your overheads by reviewing the company’s fuel consumption, as you could downsize the vehicle for the transportation of goods, or you could replace an old vehicle for a more energy efficient one. Always invest in electric, hybrid or fuel-efficient vehicles to regularly save your firm money.
Complete a Project on Time
Completing a project on time will not only help you to cut costs, but it will also impact your company’s reputation. Falling behind schedule will result in additional payments to third parties. A client will also be less likely to hire your company again and will not make any industry referrals. Hire an experienced project manager who has the knowledge, experience and forward-thinking attitude to ensure work is completed on schedule and to the highest standard.
Reworking will not only cost extra money, but it can result in the late delivery of a project. What’s more, it can create unnecessary tension between the various stakeholders. There is also the potential that a company may face legal consequences, and they may develop a negative reputation in the industry, which can prevent a firm obtaining future work from other clients.
One of the most effective ways a construction firm can save money is by preventing or minimizing rework. For example, employees should work by predetermined rules of thumb to prevent error, and all tasks should be reviewed by the site’s project manager to ensure they have been performed to the highest possible standard.
Most construction firms are tied to tight budgets and deadlines, which is why you must develop a proactive approach to cutting back on expenditure, avoiding mistakes and utilizing talent. Never compromise on quality to save money, but look for ways to streamline or change processes to significantly reduce your overheads and boost productivity.