Managing your commercial construction project budget is essential to ensure that your project runs smoothly. There are so many factors that could lead to running over budget. But, if you are well prepared and know what to expect, staying on track becomes much easier.
So, we take a look below at 3 common reasons why construction projects come in over budget. By familiarizing yourself with them, you can ensure that you save money and time and have a smooth build from start to finish.
3 Common Reasons Why Construction Projects Run Above Budget
There are many factors that can influence your construction budget and some that are hard to plan and control.
For example, bad weather and rotting floorboards. But, below we look at three common reasons construction builds run over budget. These are inaccurate project estimates, project design errors, and not hiring the right team.
Inaccurate Project Estimates
Making sure your project estimates are correct is essential to staying on budget. As such, the pre-construction stage is worth spending time and money on.
The pre-construction stage is a meeting held just before construction begins. At this stage, all parties involved being contractors, architects, and owners express their views on the budget and the timeline.
Builders and other stakeholders of a construction project often want to get the project started as soon as possible as they believe this will lead to a fast completion. But this is not always the case.
By rushing into a project and not doing proper due diligence in the pre-construction phase, you could run over budget and prolong the process.
As a result, inaccurate estimates occur as parties involved have wrongful expectations regarding the scope of the work involved.
Sometimes, contractors use a cookie-cutter approach. Meaning that the estimates of another build will be the same or similar to the one at hand. This is often the cause of inaccurate project estimates. As such, each project should be dealt with individually.
So, even though pre-construction services contribute to 15% of the budget, it’s well worth the spend. This is because it will save money and time in the long run by ensuring that all estimates are accurate.
Project Design Errors
When it comes to construction, plans are essential and the main point of reference. If there are any errors in the plans, it’s likely that those mistakes will lead to budget overruns. A design error may be a defective, badly designed, or incomplete plan.
Defective plans don’t only lead to unnecessary expenses, but they also lead to substandard work. Luckily, there are ways to prevent budget overruns resulting from project design errors. This involves using construction software and BIM.
This type of software helps to ensure that all stakeholders work together in real-time. As such, any changes to the plans are added to the digital software instead of redrawing the models on paper. This keeps the project up to date and maximizes efficiency.
Another way to prevent design errors is to ensure that everyone is well briefed on the scope of the build and their duties. This enables the team to work together seamlessly.
Not Hiring the Right Team
The right construction team goes a long way in preventing budget overruns. Even if you take all the necessary precautions, if the team isn’t right you can still expect errors and unnecessary costs.
It’s not always easy to know if you’ve hired the right team, especially if you have just started your first construction project. So, it’s best to always research your contractor and his team thoroughly.
Scan the website, look up reviews, and even try and get some information from friends or family who have maybe used the team.
By taking the time to thoroughly research your team, you will no doubt prevent unnecessary budget overruns that come from unreliable contractors.
Tips For Keeping Your Project on Budget
On top of taking the above common budget overruns into account, there are also other tips to take note of to stay on budget.
Some of these tips include:
1. Being properly prepared for your construction project. This includes planning the space and understanding the market.
2. Using value engineering. This will help save on materials without compromising on quality.
3. Hiring a project manager to oversee every aspect of the build.
Conclusion
It’s clear that there are many factors that could lead to a budget overrun. This not only leaves you out-of-pocket but also prolongs the entire process. As such, planning every aspect of your build is essential.
A major part of that planning includes doing your research. So, this guide on common reasons why construction builds run over budget is a good place to start.
Then all you need to do is hire a reputable contractor, like Chad Fisher Construction, to handle your project. We use the latest processes and technology to ensure your project stays on track right from the start.