Keeping a construction project within a budget is no easy task, as labor and supply shortages continue to plague the industry. You need to get creative with your money management strategies to control your project’s costs. Here are some effective tips to help you manage your construction expenses and get the most out of your existing budget.
Writing thorough outlines is the first big step in controlling your project’s budget. You must preview the project’s minute details, including the specific tasks, key checkpoints, tools, materials and labor distribution. Building a complete picture of your project’s scope will help you calculate accurate initial cost estimates.
Once you have this information, you can adjust or eliminate certain project elements to create more budget flexibility. For example, you will realize that a tool could apply to multiple tasks. Your team might decide to hire a subcontractor for a complex job. Multipurpose tools and qualified specialists are two straightforward ways to cut construction costs.
You need to establish a consistent cost reporting schedule and stick to it. This strategy holds your crew accountable and helps you monitor the project’s financial stability. Frequent cost reports will show you if any tasks are costing more than necessary, enabling you to make swift adjustments without delaying the project.
Make sure you keep a close eye on these costs in particular:
Submitting regular cost reports will also keep clients informed and happy. They have limited budgets too, so you need to ease their anxiety and stay transparent throughout the project.
As the world becomes more digitized, monotonous management tasks become much easier and cheaper. Take advantage of these new construction technologies to reduce your project’s costs:
The initial payments for these technologies might tighten your budget, but you can be confident in their long-term returns. Your projects will be more streamlined and cost-effective than ever before.
Sometimes you have to take an unorthodox approach to consolidate your project’s costs. Common construction materials like drywall are in limited supply these days. Instead of overpaying for these materials, opt for cheaper alternatives such as reclaimed wood, prefabricated paneling and recycled materials.
The same tactic applies to tools and equipment. If you can’t afford to buy advanced heavy machines, you could rent them instead. Renting equipment gives you access to the latest models without making a long-term financial commitment. It also saves you the trouble of doing routine maintenance.
Construction waste can dramatically increase a project’s costs. Excessive waste makes the worksite unorganized and is expensive to throw away in a responsible manner. You need to minimize your project’s waste by creating an organized work schedule and giving your employees strict guidelines for resource consumption.
Proper equipment and material storage is also essential for reducing waste. Dry and secure storage units are wise investments, even on a limited budget. Give your employees clear instructions for cleaning and operating them.
Communication is crucial for a construction project’s success. Always keep your communication lines open to your subordinates. Give them explicit instructions on their assigned tasks with no room for interpretation. When everyone knows their roles down to the smallest details, human error is less likely to occur. Proper communication leads to safety and productivity, which leads to a budget-friendly result.
Managing the budget of a complex construction project is extremely difficult. You need to account for many people and moving parts. However, more budgeting tools and strategies are available than ever. Utilize these latest advancements and remember the fundamentals of project management to become a budgeting expert.
Olivia Elsher is a Senior Writer & Editorial Manager of Construction at Renovated. She has 5+ years of professional experience writing about building practices and project management.