When it comes to keeping your construction project under budget and on track without delays, it is essential to keep your focus on your clients’ ask and needs. Without properly planning and structuring your project, you can easily miss important deadlines and annoy your client with multiple, out-of-scope change orders. Every construction project is unique. Stay focused and ready to meet the challenges of your next project to reduce disruptions and keep the project budget in line.
Managers of construction projects know that budgeting is essential, but that does not mean that you can throw everything else out the window. Multiple factors that are not always in the construction manager’s control can influence the budget, and proper management of the project can help monitor progress and issues that could cause delays or send the budget spiraling out of control.
Unlike in-house projects where it is easy to keep the work under your watchful eye, most construction projects require experts from multiple vendors who have expertise in multiple disciplines. As you build your budget, be sure to include some padding as a way to mitigate the costs of unforeseen events. Inclement weather, for example, may throw the timing of your project off and create unexpected added logistical costs. Accidents and other mishaps may take your project offline and push deadlines out.
Furthermore, good construction management budgeting can help you determine what is getting done and what may need an extra nudge. So here are some tactics that you can use to help keep that construction project budget in line.
1). Understand the Difference Between a Bid and Actual Work
While that great bid may have helped you land the project, it is crucial to understand that a bid may not precisely match the actual work that is done. Therefore, it is essential to go back through your bid and adjust for anything that could affect the plan, schedule, or budget. It is equally important to communicate your budgeting challenges clearly to your client so that all parties understand what is at stake.
Part of being a good budgeter is being able to track your construction project’s budget during the entirety of the project, which can help you create better bids in the future and help your client understand what might have changed between the time of the bid and the actual work. If your project manages to go wildly over budget, there is likely a significant omission in your bid, and acknowledging the omission can help you keep those bids in line with reality. If, on the other hand, you happen to come in significantly under budget, you may want to consider making changes to your bid process to help you land better projects.
2). Define Your KPIs
KPIs, or key performance indicators, are hugely important when it comes to construction management and budgeting. If your projects are not hitting the requisite KPIs or you’re not tracking the success or failure of your projects beyond the budget, you could be leaving a lot of valuable information on the table. By comparing your tasks to the success or failure thereof, you will be able to develop a better understanding of the factors that have enabled your success or drove you to failure. When you understand these variables, you will be better equipped to create more successes.
It can be tempting to declare a win at the bid stage and simply go through the motions during the actual work. But everyone knows that a construction project’s budget is an exact mirror of the work that must be done, as well as any failures in management or planning thereof. Therefore, when management stays on top of the work and communicates effectively with both the workers and the client, the likelihood of encountering problems that could derail the project are reduced.
Being a good communicator does not necessarily mean that you have to schedule daily meetings and disrupt the flow of the project. Keeping the lines of communication open with crew members and other important stakeholders can help keep everyone informed and focused on the big picture. It will also ultimately help you save time and ensure you are keeping abreast of the latest developments.
4). Manage the Schedule in line with the Budget
While your construction project’s budget may receive the lion’s share of attention from your client, it’s equally important to be sure to align your budget with your schedule. If you’re not paying attention to deadlines and other important dates, it will be challenging to know whether you are ahead of the game or behind, and that can spell disaster for the project and your relationship with your client. Many companies report that falling behind is the number one reason for project dissatisfaction. If certain payments in your budget are tied to hitting specific project milestones, then your misalignment may also result in lost revenue.
5). Manage Your Staff Resources
Most construction projects hardly go exactly as expected. That is because many variables cannot be anticipated ahead of time. Therefore, as variables shift, it is essential to pivot along with the changes so that you can keep your project under budget and on time. Staff resourcing issues are a common cause of unexpected changes to a project that will affect the budget and schedule. Sometimes crew members have to take a sick day or may unexpectedly quit. If you are not on top of it and making the necessary adjustments to the schedule and budget, you could end up far behind on an important deadline, potentially jeopardizing the project itself.
6). Document and Track Everything
Sure, you may get lucky and complete your next construction project under budget and on time without much fuss, but that is more the exception than the rule. In all likelihood, your project will have to be meticulously managed at each step of the way to ensure the work is done correctly and that any feedback is adequately communicated to the decision-makers. Please resist the urge to simply check boxes and answer yes or no questions – nuance and a full accounting of everything in your budget from parts to labor should be comprehensively tracked, arming you with the information to go back and audit the project for its successes and failures.
If you need additional help managing your construction project’s budget, timeline, or staff resources, the construction management experts at EAD can help. Contact us today.