Every construction project has its ups and downs. Sometimes, it feels like you’re robbing Peter to pay Paul.
Maybe you did well on substructure but you end up struggling with finishes. There’s always a balancing act to figure out when it comes to finances, no matter what you do.
Here are ways you can start to master that balancing act and get the quality you need without breaking the bank.
1. Bill of Quantities
Start with a measured and priced bill of quantities (BOQ). This is key to starting any project on the right foot. Without an accurate BOQ, you end up lost and scrambling for your way back later. A precise BOQ is your financial roadmap to real profit.
2. Break the Project Down to its Elements
Divide the project into clear elements. Think substructure, landscaping, wall finishes and drainage. Breaking down each element means you can clearly see what’s happening where and keep on top of costs.
3. Use First Principles
Apply first principles to your rates. Compare your rates to on-site activities. For example, with concrete foundations, ensure the rate covers all costs and allows for profit. It’s the most accurate way to avoid any shortfalls.
4. Compare Elements to Your Work
Regularly compare the costs of each element to your project timeline. Are you in the red or black at any specific stages? Knowing this lets you adjust and stay on track.
5. Mitigate Early Risks
If you’re in the red at the start, maybe during substructure or external wall builds, address it early. Mitigate risk by revisiting the BOQ and adjusting where necessary. Getting on top of it quickly means less headaches later on.
Conclusion
Mastering your finances on a construction project is always a fine balancing act between wanting to boost profits without compromising on quality.
Keeping an eye on your costs compared to your timeline, addressing risks early on and breaking the project into its elements will give you the best footing for moving forward with your project finances.
If you need help understanding your costs and figures, contact us today at Carroll Estimating to find out how we can help you grow your business and make more money with a seamless process from tender bid to final account.