The construction industry is known to have extremely tight margins, meaning that businesses operating in the industry have to really watch their pennies during projects to make sure that they make a profit.
Here are six handy tips to help you reduce costs on your projects and stick to your assigned budget:
#1: Ensure estimates are accurate before you start any work
When starting a new project, making sure your estimates are accurate whilst you’re still in the planning phase is vital. Accuracy is so important during the planning of the project because any mistakes made here will almost certainly come back to bite you during the later stages, as these will likely result in hefty costs later on.
But how can you ensure your estimates will be accurate? We’re glad you asked. Our estimation software tools reduce the likelihood of human errors on your estimates by building the list of materials you require, as well as running the numbers for you.
Not only will our software tools help you ensure accuracy, they will also save you a significant amount of time with on screen take-offs and report generation. Our clients have reported being able to work up to 80% faster by making the switch from manual take-offs and estimates to our software.
#2: Communication is key
It’s extremely important to communicate during any construction project, whether you’re planning the project or sourcing materials for it. A lack of communication can cause a range of issues that can come at a cost to your budget.
When planning your project, you must ensure that everybody that should have access to the latest drawings do have this access, particularly when you’re working with other companies in different trades. This is so important as if different people on site are working from different drawings, this can lead to conflicts, which could be disastrous to your budget if such conflicts are not identified until the building phase.
Communication is beneficial when sourcing materials as developing long term working relationships with suppliers and contractors can often enable you to negotiate prices. This is because it becomes mutually beneficial for you to source materials for the best price and for the supplier to secure repeat business in the future.
#3: Recognise and plan for potential risks
When you’re still in the pre-build stage of your project, it’s best to spend some time identifying possible risks that could hinder the project. This will allow you to co-ordinate your project timeline and budget accordingly to safeguard yourself. It’s important at this stage to assign cost and time implications to each of your identified risks. This is a great way to minimise the number of costly surprises throughout your project.
#4: Have a skilled workforce that can multitask
If you make it your aim to hire staff that are qualified to fit multiple job roles and willing to multitask, your workforce will get far more done with less staff members required.
While the process of recruiting such staff will likely take a bit longer, it will definitely be worth it as such workers are invaluable and can save your business both time and money in the long run, which is why it is important to treat your staff accordingly so you retain the talent you have secured.
#5: Keep your operations organised
When thinking about reducing the cost of a construction project, your existing operations processes are not the first thing to come to mind, but they are definitely worth looking at, as you may be surprised by what you could save by tightening up your processes a bit.
Tool servicing and budget
Servicing your tools is a key area you should review, as you could be spending out on replacement tools unnecessarily or due to negligence. While it is always easier to replace tools instead of waiting for them to be serviced, it isn’t cost effective, so it’s important to assess if servicing tools will get them running smoothly again before opting to replace them. The need to replace tools could also be due to neglecting to have your tools serviced at the recommended intervals or if they seem a bit sluggish, which over time could well cause your tools to break.
Inevitably, there will be scenarios where tools must be replaced and a service will not do the trick. You should assign some cash specifically for this. However, to cut back on these costs you could introduce a tightly controlled tools budget, which will enable you to monitor when replacements are needed (and when they aren’t).
Keep track of your materials
With so many field-based employees working on different construction sites, it can be a difficult task to keep track of all your materials and you could end up being unable to locate tools. However, with a limited number of tools available it is vital to keep track, as not doing so can easily cause projects to be delayed with employees having to wait for the tool they need to be available or located.
Being unable to locate tools can be quite a common occurrence, as employees may hoard tools or might not have completed the necessary paperwork when taking a tool from the warehouse. Employees could be inclined to hoard materials if they know they will need them again, or if they have struggled to get them in the past. While not completing the necessary paperwork (or “signing out”) tools may be an honest mistake, it does cause a significant problem, as the paperwork exists to help the business keep a record of who has signed the tool out and when they have done so.
Problems locating materials can become a costly affair for your business as you will have to fork out for replacements and whilst you’re spending time locating or replacing said tools, you will experience productivity losses as your staff will be unable to carry out tasks without the necessary tools. With just how costly this could be, it’s worth making every effort you can to keep track of your tools and make sure that all employees are completing the paperwork!
#6: Effective timekeeping throughout your project
We all know and appreciate just how important it is to meet deadlines, as they are set and agreed with your clients. While it can be easy to forget about the deadline until it’s approaching, it is key to keep to your timeline throughout the entire project as any delays can easily contribute to the project overrunning.
Ineffective timekeeping can have a significant impact on your business both immediately and in the long run. If you miss your deadline, it is inevitable that you will end up having to pay extra costs on any additional labour and materials that are required. While it would be near impossible to never have any projects overrun, you can minimise the likelihood by closely monitoring the timekeeping on each project. This is recommended, as if deadlines are continuously missed this would eventually have a negative impact on your business’ reputation and could reduce the amount of work you win in the future.
Keen to start reducing costs on your next project? For more information on how Ensign’s software tools can help your business save both time and money head to our homepage or get in touch with our friendly team. Or if you’re ready to see our software in action, you can book a free guided demonstration of our software at a date and time that suits you.