Construction costs are always rising. Recently, costs have risen by around 14%. A combination of labor shortages, inflation and supply chain disruptions mean it’s harder to hire affordable commercial contractors.
Are you trying to get a project done on time while remaining on budget? This blog introduces some effective construction budget tips to help get things under control.
- You Need A Comprehensive Budget
You can’t manage the budget if you don’t have one, do first things first, you’ll need to make a comprehensive financial plan. A good budget starts with a comprehensive breakdown of the project’s expenses. For example, include the costs of labor and materials. Also, include indirect expenses like acquiring permits or making contingency plans.
Once you’re sure of your expenses, you should use historical data to produce realistic cost estimates for each category. Of course, the budget is a living document that should be updated in real time. As the scope of the project changes and the price of materials and labor fluctuates, you’ll need to adjust the budget accordingly.
- Monitor All Expenses
Having a workable budget is only half the battle. It doesn’t matter how well you plan. If your plan doesn’t line up with the real world, it’s not much use. You’ll need to do frequent reviews of your finances, to ensure they line up with your plans. If your workforce is running up too many additional expenses, you might have to reconsider your contractor budgeting strategies.
One of the most important cost control tips is that there must be accountability at every level. Anyone who spends money on the project should keep detailed records.
- Keep Stakeholders in the Loop
For a construction project to be successful, all the stakeholders need to be on the same page. Too often, the client and contractors don’t see eye-to-eye on the budget. This can cause huge problems such as project delays, sub-par construction or even safety issues.
Ensure everyone is reading from the same script by having regular stakeholder meetings. During these meetings, you can address the budget and address any concerns.
- Anticipate Potential Problems
Every project is the same, what can go wrong – will go wrong. When doing financial planning for contractors and construction, you always need to have contingency plans. Identify potential problems by doing a formal risk assessment, and allocate funds to be set aside for unexpected expenses.
- Focus on Efficiency
Another one of the classic budget management tips is to be more efficient. All projects have areas where bottlenecks and other problems cause sub-par performance. For example, maybe contractors are frequently delayed by lack of building materials.
Find ways to streamline operations, reduce downtime and get more value for money, and you’ll be able to spread your budget much further.
You Need to Find the Right Commercial Contractor
If you want to stretch your budget to the limit without compromising on quality or safety, you need the right commercial contractor. With over 40 years of experience, HHJ Architecture & Construction are here to help deliver your commercial project on time and on budget.
Contact us today, and let’s discuss your project.