Running a business can be expensive. Labor, materials, and overhead costs all play a part in how much you make on a project. These costs can get out of hand which will cost you money instead of making you money.
Most Common Reasons Why Construction Costs Get Expensive
Construction costs can quickly spiral out of control. Before you start a job, you need to look at the direct and indirect costs. This will give an estimate of how much it will cost. You can still have a project go over budget because of mistakes like not having enough materials or underestimating how long the job will take. Learn what these mistakes are so you can avoid them
1. Not Shopping Around for Materials
You might be missing out on the chance to save a lot of money when you don’t comparison shop. Instead of sending your workers around to local retail stores, try shopping for all the materials at wholesale dealers that offer inexpensive online purchases.
Comparing prices for construction materials online allows you to save a significant amount of money when buying in bulk. By purchasing building products in large quantities, the savings will quickly add up on larger orders.
2. Poor Site Management
If you want to try to get a project done in less time, make sure that all of the right people are on site. Have a good manager on site who sets clear task goals and communicates clearly with everyone.
3. Hiring the Right Workers
Hiring the wrong people can affect your performance and deadlines. The wrong team may not produce quality work or suffer from absenteeism problems, not to mention the fact that you’ll need to replace them during a project which will cause delays and cost you money.
4. Cost Planning Errors
Construction projects may experience cost overrun due to spending more than expected or budgeting less than needed. Underestimating costs may help you win a bid, but it could cost you in the end.
Don’t forget to take into account the typical overhead expenses, such as administrative operations, employee training and legal fees. Site overhead costs are an important factor in the bid price. For example, general site overhead maybe 2% to 5% of direct operating costs. It’s better to have a correct bid and use construction cost-saving ideas instead of underestimating the total cost and cutting into the money you make.
5. Human Error
Human error adds a lot of business expenses to the list. When employees make accidental mistakes, it costs your company money.
Workers make mistakes. In some instances, this means redoing tasks that are already completed and wasting company time and resources.
6. Environmental Delays
Construction crews may run into a delay due to weather. This may prompt workers to either cut corners on quality or make mistakes, ultimately costing more money than if they had finished the project sooner.
Even if you are unable to forecast when natural disasters or inclement weather will happen, investments in insurance can help mitigate your losses.
At GFC we are working towards a better construction industry for all and while we can’t solve all of your building contractor problems – we can help you with a few. Whether you take advantage of our free same-day delivery service in the major cities or use our project pricing service, we are here to help.