They say that failing to plan is planning to fail, and nowhere is this any more true than in the construction industry.
With so much invested in the success of any given project, every last detail must be meticulously accounted for, from the initial blueprints of the development itself right down to the size and quantity of the screws used in the construction process.
Of course, you already know this, and you would no more start a new project without architects’ drawings and a schedule of works than you would hire an excavator without first checking you had someone on site that could operate it.
Yet whilst the majority of professionals and self-builders alike make sure they’re fully covered for every eventuality, so many overlook or underestimate the one essential element that is fundamental to a successful project
Proper budgeting and cost planning
Above all else, the ultimate goal of any construction job should be to deliver maximum quality for minimal investment.
This is only possible with a comprehensive plan in place.
Go for the cheapest possible option on materials and labor, and you end up with a poor-quality development that is only going to cost you more in the long run when it turns out that the finished project just isn’t up to scratch.
The end result?
You lose money.
Go for the most expensive products and the most costly laborers, and you’re eating into vital profits. Again, losing money.
It couldn’t be more simple.
If, for some bizarre reason, you’ve always dreamed of losing money on a construction project, just forget all about planning.
Need a little more advice?
You’ve got it.
Here are a few more tips on how to make sure you spend more than you need on your next job.
If you want to lose money in construction…
1. Don’t – Create a Cost Plan
Skip this, and you’re well on your way to throwing lots of money away.
Done properly, a cost plan will answer the one question you should be asking before undertaking any new construction project:
Is this affordable?
A living document that changes and grows as designs are drafted and blueprints put together, your cost plan allows you to see how much it is going to cost you in real terms to bring those plans and drawings to life.
Create this, and you will have a firm idea of the exact price of your project -allowing you to source the necessary funds in advance, identify areas for cost savings, and even decide whether or not the project is even financially viable at all.
Fail to cost plan, and the likely scenario is that you’ll invest all your money on a half-finished project, only realize that there are no funds left to complete it.
Ergo, money down the drain.
Looking for more ways to lose money in the construction industry? Try this:
2. Don’t Carry Out the Rest of Your Feasibility Study
Your cost plan is just one part of a wider feasibility study which, as its name suggests, assesses just how feasible it is going to be to complete any given project.
That means not just planning for materials, labor, and equipment hire as part of a cost plan, but also taking into consideration other issues which may well impact the long-term cost of your project.
Are there likely to be any legal challenges faced by this project? If so, fees for solicitors and other professional support need to be considered.
How much -if anything- will you need to invest to offset the environmental impact of your project?
These are just some of the questions your feasibility study can answer. By doing so, you’ll have a concrete idea as to whether this project is financially viable.
Leave the feasibility study out altogether, however, and you may find that you run into unexpected costs that take a huge chunk out of your budget, another easy way to lose money.
Still not lost quite enough yet? Here’s something else you might want to consider:
3. Don’t – Compare and Qualify Quotes
Think about the last big purchase you made in your personal life. Whether it was a new car or a luxury holiday. You didn’t want to lose money, so chances are you shopped around to get the best deal, didn’t you?
Doesn’t it make sense then that doing the same thing for your next construction project could stop you from losing money there, too?
Getting several quotes is essential for ensuring you’re getting the absolute best value for your money.
As we mentioned earlier, going with the most expensive quote in the belief that the more you pay, the better the quality, isn’t always the best route.
The most expensive quotes are going to take a bite out of your budget then is really necessary.
The lowest-priced quotes aren’t always the best deal either. It’s not uncommon in the construction industry for contractors to price exceedingly low to win the job, but then make up the shortfall by making extra work claims or even -in extreme cases- simply leaving a job when a higher-paid one comes along.
The best possible quotes are the ones that offer value for money at a reasonable sum but hey, if you want to lose money, go ahead and opt for the highest or lowest. You might want to try this, too:
4. Don’t – Bring In Outside Help
It’s tempting to attempt budgeting and cost planning yourself, isn’t it? After all, how hard can it be?
The truth is that, whilst a novice can put together a basic cost plan, it takes the advanced knowledge that only a professional with years of experience can provide to get the absolute best possible value from any budget.
Seasoned cost planners and quantity surveyors can work with their trusted network of suppliers to source the best prices, whilst their years of industry experience means there are few challenges they won’t have faced -and overcome- before.
Choose to go it alone, however, and you not only lose out on that invaluable industry experience and expertise but also lose valuable time that you could be spending on doing what you do best – growing your business.
Prefer to save money rather than lose it?
Do – Contact a Construction Consultant
An experienced construction consultant can work with you to assess the feasibility of your project, determine an affordable budget, and help you deliver a project which doesn’t just stop you from losing money but helps you to generate more revenue than you could on your own.