Have you ever tried building a sandcastle? Most of us have. So you know that building one takes time and effort. You can spend hours just getting it all in one place and the ocean can wash it away. Why are we telling you this, though? What does a childhood pastime have to do with building large-scale buildings? Well, there is a connection.
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Creating and building anything, big or small, takes a lot of time, resources, and effort. Just like the ocean, all your efforts can dissolve if you overstep your construction budget. Remember, the foundation of the structure is built, not just with bricks, but with thorough planning.
Whether you are a builder or someone actively involved in the construction process, your first step is to work towards saving construction costs. This will not only help you stay within your budget but also give you better ROIs at the time of selling the construction project. Saving costs during construction is often seen as an uphill task. After all, materials, resources, and manpower all need money. There is no escaping or removing the essential aspects of a construction project. If you too are facing this, then you could be missing out on some blind spots – areas where mismanagement is leading to overspending.
Most Common Reasons Why Construction Costs Get Expensive
In this section, we will tell you how you can identify blind spots that increase your construction cost.
1. Last Minutes Construction Changes – Did you just have a sudden urge to change the east-facing balconies to north-facing? Such changes are costing you money. The architectural blueprint of your project is what you need to follow immediately after construction begins.
Any changes made during the process, no matter how early, will cost you money. This is because the materials, manpower, and timelines are designed based on these initial blueprints. Any disruption just leads to the need for work hours and materials – automatically increasing your costs.
2. Un-qualified Workers – You wouldn’t trust an engineer to fix your teeth right? There is a reason every field has professionals whose expertise we need. The same holds true for construction. Often people believe that hiring unskilled manpower to lead a construction project is alright. It’s not. Unqualified workers will need 2x more time to complete the project than professionals.
It’s simple, professionals know what process to follow to get the best results in a short amount of time. An unskilled and non-expert resource will not have these skills, thus leading to a loss of time and an increase in cost.
3. Choosing Quality Over Price – You might be surprised at this one. We usually hear this in a statement in a positive sense. This is true but to an extent. Don’t go overboard, in your quest for “high-quality”. For instance, you might feel that internationally sourced material is of high quality even if it 10X more expensive than locally produced goods. This is not true.
Often, local raw materials purchased from local vendors have the same quality standards. This means you can reduce your transport costs and get the same benefits. You won’t be compromising on strength, so don’t worry. Opt for quality but keep the price tags in mind.
4. Mis-management of Cost Planning – This is a core problem that remains unsolved. Most construction plans begin with an incomplete strategy for cost-allocation. Will you need 2,00,000 INR to purchase cement or is 5,00,000 INR necessary to buy glass for French-style windows?
Rarely is the nitty-gritty of cost planning analyzed. This leads to overspending on unnecessary materials or resources. This mismanagement is one of the core issues that, if solved, can reduce your costs considerably.
5. Buying Heavy Equipment – Do you need a plier to cut open a packet of chips? No right. Similarly, you don’t need to invest in heavy machinery when a simpler tool can solve your problem. Most contractors and builders make the mistake of buying heavy equipment that is utilised only once or twice.
Since such equipment is extremely expensive and investing in it proves to be a liability. Especially if it remains unused. This is another hidden problem that adds to your construction cost.
Once you identify these areas, you can further narrow down exactly what is costing you more money and time. If you are just starting construction, then it’s best advised to address all these issues at the onset. You can bring in professional planners and a team who can build a clear blueprint with timelines, cost allocation, and resource management. Spending time initially will reduce your costs in the long run.
How Much Do Professional Builders Spend?
This question has no definite answer. It all depends on where you construct, the type of architecture you desire, the scale of operations and more. There are many dependent factors that determine the cost of a project. For instance, you could spend 1750/- for a 1BHK of 2000 sq ft in Chennai, a metropolitan city. The same house would cost you less in Coimbatore. Geography plays a crucial role in determining costs.
Yet, this does not mean you are working with zero knowledge. Professional builders may spend enormous sums of money on projects, but they also have tricks that help them save costs. Even if you don’t know the exact cost to be incurred, you can always manipulate certain processes so you save more without compromising on quality. Listed below are some ways by which you can reduce construction site costs.
Yet, this does not mean you are working with zero knowledge. Professional builders may spend enormous sums of money on projects, but they also have tricks that help them save costs. Even if you don’t know the exact cost to be incurred, you can always manipulate certain processes so you save more without compromising on quality. Listed below are some ways by which you can reduce construction site costs.
Ways to Reduce Job Site Construction Costs
1. Materials Management – The basic foundation of your future structure will be based on raw materials. Cement, sand, gravel, clay, concrete, marble, wood, glass, TMT bars, Sree Metaliks Limited all make up your structure strong. Yet just sourcing these materials in bulk is not enough. It’s integral to manage their use effectively. A lot of wastage occurs when materials are mismanaged. Avoid this and you will have a surplus of materials. This will also help you save on reinforcements of materials.
2. Focus on Industry Connection for Lower Costs – Professional builders have deep connections with vendors spread across India. They know exactly who offers the best concrete, for instance, and at what price. This is the power of connections that helps professional builders save costs. Local vendors are willing to offer discounts and are more flexible when it comes to offering materials. Some even make provide materials without a hefty advance. Work with architects, designers, and vendors and use their connections to get the best deals during the construction process.
3. Research Market Before buying Construction Materials – Research, research, and research – an integral aspect that’s usually missed when planning a construction project. Most builders have teams that carry out extensive research months before starting the project. This research includes an understanding of the available materials in a certain region. The next step is identifying local vendors who offer the best deals and discounts. It is at this stage that the final costs for procurement of raw materials can be decided. The more you explore and research the market, the more hidden deals you can uncover.
4. Experienced Worker, Quality Work Policy – Experience may come with a higher price tag but it reduces your costs. Hiring experienced workers and manpower means working with professionals who are thorough with their work. When you work with professionals, you can rely on quality service, timely deliveries, and an immediate addressal of problems. Professionals don’t need to be spoonfed and know exactly what process improvements are needed to accelerate the pace of the project. All these qualities save time and invariably cost. Ensure you work with professionals with vast experience in your area of construction.
5. Hire Dedicated Resources for On-site Efficiency – Corporates hire managers to run sales, marketing, operations, and other departments. There is a reason dedicated resources are hired for specific tasks. This ensures smooth functioning of the departments. The same model should be imitated when hiring resources for your construction projects. For instance, hiring engineers, architects, procurement agents, quality engineers will give you the necessary expertise to run operations smoothly. These experts can also reduce your workload by reporting to you and managing smaller issues amongst themselves. This gives you more time to plan. Hiring dedicated resource reduces your cost and gives you the leverage you need to complete projects on time.
6. Invest in Long term Tools – Most professional builders know that certain tools are only needed for a specific project. They are also aware of what tools will be needed through the entirety of a project and beyond. So they invest in long-term tools. It is this choice that makes all the difference in saving costs. In your project, speak with your experts and identify which long-term tools you need, and invest only in those.
7. Get Heavy Equipment on Rent – Large equipment needs a lot of monetary investment. If you buy such equipment it can take up to 50% of your entire budget. Ask yourself if you need to buy this equipment for one project? No. It’s cheaper and more efficient to rent equipment for a short duration. This also reduces your maintenance and other costs associated with owning large machinery. Work with providers who offer such equipment for rent at reduced costs. This will help you save costs and hire the machinery you need when you need it.
8. Eliminate Construction Waste – An added benefit of material management, something we covered in point 1, is waste reduction. In most instances, construction material is wasted unnecessarily. This is because materials aren’t used properly, leading to an increase in waste. This adds to your cost, because the more you waste material, the more you need more material. To avoid this, it’s best to work with your team. Plan material allocation for each phase and regularly monitor if the wastage is in control or not.
9. Create Budget Conscious Plan – Imagine you run out of all raw materials within the first phase of construction. This can be a nightmare and one you want to avoid at all costs. The way to avoid such drastic shortages is to make a very budget conscious plan. Allocated budgets for different aspects of construction will make it easy for your team to use materials and resources judiciously. This will, in turn, reduce wastage and costs.
Importance of Improving Profitability on a Construction Project
Undertaking a construction project is not a one-person job. It involves the time, investment and resources of many people. To ensure everyone on the project profits, its integral to reduce costs. You can’t spend highly on the project and expect your end buyer to pay the price. There are ways you can improve the profitability of a construction project. Read them here.
1. Improve Productivity – This is where thorough planning comes in. When you effectively lay down a plan for construction, you and your team can finish the task earlier. When a project is completed before the deadline, it means that all your costs are automatically reduced. Strategic and realistic planning coupled with a professional team can make this possible for you. To start, begin with understanding the team’s productivity time on previous projects and you can make an estimate for your project.
2. Know Your Costs in Advance – Having visibility of all your costs in advance is an underrated benefit. When you lay out costs, you are not left in the dark and don’t have to deal with unexpected expenses. From operational costs, overheads, material procurement, transport, and manpower to a reserve fund for emergencies – all these should be kept in mind before embarking on a new project.
3. Estimate for Profit – With improved productivity measures and an understanding of costs, you can estimate for profits. If you can crack this, you can easily reach profits just like you planned. All it takes is a good team and insights of experts. So estimate your profits even as you calculate your expenses. This may seem tough to do since you don’t want to make unrealistic expectations. But know that when you have clarity on the team’s productivity hours and the exact cost of each material, you can easily plan for profits.
You are now at the end of our article but equipped with tools and insights that will help you reduce construction costs. Remember, these are tips gathered from experts, so use them and make them your own. It might take you some time to find your feet as you work with these tips but be assured that construction teams are benefitting and saving costs from such insights. Above all, it all boils down to your planning, your team’s expertise, and your confidence. Work with the best to get the best. So without fear, go ahead and build the future of humankind.