According to construction industry experts, the number one reason for construction projects stalling is that they go over budget. An overbudget project is most likely the result of an error or omission during the project planning phase.
A stalled project will not only cost you more money in terms of lost opportunity costs and budget increases, but it may also have an impact on the final quality of the construction. As a result, it is critical to ensure that your building project does not stall at any point during the construction process.
If you have meticulously planned the entire project and have included the appropriate experts, you can be confident in your ability to complete it on time and within budget. As a result, it would be even more disheartening if you had meticulously planned your project as a client and still fell short.
So, if you are currently working on a project or are about to begin one, keep the following key points in mind at all times. These will allow you to keep track of whether you are on budget or not.
- Going Above the Project Baseline
Every project has a baseline that provides a benchmark of the cost, scope, and schedule at any particular time. Note that this could be any nature of the project, from the simplest residential dwelling, a landscaping project, or even a large, multi-disciplinary project such as commercial real-estate development.
The project baseline is pre-defined and tells the project manager or owner if key performance indicators are being met at any given time, and not just at the end of the project. For example, if the baseline is a graph set from cost versus time, if the actual slotted values of cost-versus-time produce a graph above the pre-set baseline, you’ll automatically know that you are going above the budget.
2. If You’ve Gone Over the Maximum Time Limit Allotted for The Project
This one is simple. Assume that you have exhausted your expected expenditure at specific milestone times, or even at the end of the allotted project time and the works are still not complete. This is a sure indicator that you are going above budget with your project.
3. If You’ve Made A Significant Alteration to The Original Design
Any changes to the original design must be documented and reflected in the new project costs for commercial projects involving a large project team composed of architects, engineers, and so on. However, it is not uncommon for changes to the original build to be made and not documented in smaller residential and non-commercial projects. This will have an effect on the overall cost of the project.
Assume you’re building a house with the original design assumption for the foundation being a stable murram subgrade. If you come across a different, less stable foundation on-site, such as clayey or black cotton soil, this will be a significant change to the original design, and you can expect to go over budget.
4. If You Have to Pay for Damaged Liabilities
Damaged liabilities in this regard are anything outside of the apportioned and approved costs that you may have to pay as a client or as a contractor. If, say, you build on a road reserve (maybe as an error or omission), you may not only have to pay for the costs of pulling down your hoarding but you may also be forced to pay a fine to the authorities. Thus, you can expect to go over budget even if a remedial measure is to be taken before the situation escalates.
5. If You Realize a Costly Mistake Too Late
An error in design or construction can cost you a lot of money in the long run. Design errors usually involve the structure and are expensive to fix, especially if the project has advanced significantly. These may include the foundations, structural elements like beams and columns, or even the roof truss.
While mistakes in design and construction are common, they can be avoided by hiring an experienced team rather than “doing it” yourself. Leave each task to a qualified professional, such as an engineer or quantity surveyor, to reduce the likelihood of such an experience.
6. If Your Project Isn’t Quite Coming Out The Way You’d Hoped
If your project looks great on paper but the actual build looks shabby or even like a different project entirely, expect your costs to exceed your budget. This may occur if, for example, you are building remotely and have delegated project management to someone else (for example, those in the diaspora who use family members to build for them).
If the project appears to be less appealing than you had hoped, it may not be practical to abandon it entirely. Making any new amendments, however, will result in a shooting of your original budget.
What’s The Best Way to Stay within Your Budget?
Before beginning any construction project, hire the right team and always seek professional advice. The expert fees may appear high in the short term, but they may save you time, money, and disappointment in the long run.
