Budgets. Some people swear by them, others swear because of them.
When it comes to construction projects, budgets are vital, but they aren’t always the easiest to keep to. Here, we detail our top 6 reasons that push projects over budget, and how you can avoid them.
1. Unrealistic Expectations
Budgets are inherently grounded in tangible data. While there are estimates involved, it’s key that you are guided by the facts. Having unrealistic expectations when drafting a budget is perhaps the most common reason a project will go over.
There are many factors that go into a budget, and they all need to be considered. It can be tempting to try and complete a project for as little money as possible, but this will most likely come back to haunt you further down the line.
2. Incomplete Knowledge
Having a vision for a project and having the expertise needed to oversee its delivery are two very different things.
Without the necessary knowledge, outlining a budget will be difficult. Estimates on costs and time frames may be off, resulting in additional expenses being incurred later in the project.
Having the right knowledge to take your idea from concept to reality is crucial, but the person with the knowledge doesn’t have to be you.
Having a consultant or team member with the relevant skills and knowledge will help you with problem solving, so that when an issue arises, they’ll be able to find the best and most cost-effective solution, keeping to your budget as closely as possible.
During a construction project, there are going to be a huge number of decisions to make, and not all of them will be expected. Even if you meticulously plan before the project begins, there will most likely be unplanned issues that arise, and when they do, they need to be dealt with quickly and decisively.
Costs can start to rise is if these issues aren’t dealt with in a timely manner, or, as stated above, they are made without the appropriate knowledge, leading to a more expensive solution, or one that doesn’t work.
4. Starting before you’re ready
Construction projects are exciting. You might be working on a new building that will alter a city’s skyline or refurbishing and changing an existing building to suit your purpose.
Whatever the project, it’s important to not get under way until you’re ready. Comprehensive planning should be undertaken before you start to ensure that all variables are considered.
It sounds obvious, but more projects than you might think are started by overzealous clients who end up unintentionally adding on costs that they initially missed as they didn’t plan fully first, ultimately pushing their project over budget.
5. Dealing with the unknowns
As previously mentioned, construction projects often throw up problems that even the most comprehensive planning may not have predicted.
When combined with indecision, these unknowns can cause a project’s budget to skyrocket.
It’s easier said than done, but preparing for the unexpected will help combat these unknowns.
Some factors aren’t easily predictable. However, building a margin of error into your budget will help account for any unexpected issues and keep your project on budget.
6. Management & control of the process
More often than not, it’s poor project management that causes a trickle-down effect that results in all of the previous points. However, with effective project management, they can all be dealt with.
A good Project Manager will help you keep your expectations in check, fill any gaps in your knowledge, provide quality and decisive decision making, ensure the everything is in place before starting your project, and deal with any unknowns that may arise throughout the design, procurement, and construction process.
This will ultimately mean that your project has the best chance of being completed on time, and on budget.
At Quoinstone, we offer a range of comprehensive management services fit for any construction project, as well as a Cost Management provision that can help keep projects on budget and maximise the return on investment.