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7 Golden Rules to Keep Your Construction Project Under Budget

Explore what every contractor needs to know about completing construction projects on budget every time.

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Every contractor wants to stay on budget. Keeping your construction project under budget isn’t as easy as following all the specifications. Many roadblocks can occur on your way to completion. However, there are some rules and best practices to follow so you remain on target, delivering a quality project that doesn’t disrupt the budget.

Why Staying on Budget Matters

As a contractor, the project budget can be your biggest nemesis. You have no intention of going over budget, but then projects take a turn. While you can control everything related to staying on budget, your reputation and livelihood will often depend on how well you managed the budget. Let’s look at some vital ways to remain on budget.

Rule One: Maintain Accurate Estimates

Spend the extra time to price out each part of the job. While you may have a general cost per square foot rate, it won’t be applicable to every job. Write into your estimates contingencies as well on unknowns like electrical or plumbing. Customizing each estimate to the job will save you future headaches when costs begin spilling over.

Rule Two: Understand Material Costs

Material costs can change quickly, depending on availability, quality, and tariffs. Price each material based on its current cost versus historical costs. With this information, your material costs should be as accurate as possible. Always add a 20% contingency as well.

Rule Three: Be Ready to Pivot When Plans Change

Building plans can change, as issues become apparent or simply because the homeowner or building owner changed his or her mind. At any time when building plans change, so should your contract. You can’t expect to stay on budget for a plan that no longer exists.

Add any new material and labor costs that will be required due to changes. Ensure the client is aware of the price changes they’ll incur.

Another area of budgeting to consider under this rule is project design errors. When you are reviewing building plans with architects, designers, and others, you should be looking for designs that are problematic. Addressing those early rather than later can keep your budget from creeping up.

Rule Four: Worry About the Small Stuff

Being detail-oriented can save you money. While you want to look at the big picture, don’t forget how small things can upend your budget and timeline. Check on the little things like making sure there are enough screws. Something as minute as this could impact your ability to get the job done on time.

A detailed perspective is also necessary in the administration of a project. There can be errors that can impact costs. Project administrators should be on top of this, but you need to communicate with them often to ensure there are no overruns.

Rule Five: Eliminate Waste

Wasted materials can add up and tip your budget. That’s why the adage “measure twice and cut once” holds true. The more exact and precise your staff is on using the materials, the more you can eliminate any waste. Train your workers to live and breathe this. By planning each detail out, you are sure to keep material budgets on track.

Rule Six: Manage Your Site with Care

A worksite can be a space of disarray and clutter. Equipment, materials, and debris often dominate sites. But managing your site with care can help you stay on budget. You should ensure that your site is always tidy and organized. Just doing daily cleanup and tracking material usage enables you to understand if you have enough materials. It also keeps equipment and tools clean and secure. If a job site is too chaotic, then it would be very difficult to gauge your inventory.

Rule Seven: Use the Right Team

Your workers are your most valuable asset. You need to ensure they are well trained in their jobs and that they have the protective gear needed to ensure a safe jobsite. Any accident while on the job could cost you considerably. Doing your best to create a culture of safety can go a long way. You also need to ensure that your staff can perform the specific duties of the job because sloppy work will only cause delays and extra costs from revisions.

Remember these seven golden rules to keep your construction project under budget. By using these tips, you can ensure that projects are completed without any major hits to the budget.

Product Compliance and Suitability

The product statements contained in this guide are intended for general informational purposes only. Such product statements do not constitute a product recommendation or representation as to the appropriateness, accuracy, completeness, correctness or currentness of the information provided. Information provided in this guide does not replace the use by you of any manufacturer instructions, technical product manual, or other professional resource or adviser available to you. Always read, understand and follow all manufacturer instructions.