In construction, it is important to have a plan. If you’re a business owner, or working as the project manager or quantity surveyor for your construction company, then it is essential you know what steps to take for project success and profitability.
Reaching out to professionals gives you a wealth of information, and understanding the how-tos can help you prevent problems before they begin. Not all construction companies are efficient or run like a well oiled machine. There are many things that you can do to make sure your company runs smoothly, so you have more time to focus on your business as a whole.
You’ll learn what needs to be done in order for projects to go smoothly from start to finish so that they’re on time, on budget, meet quality standards and deliver value for customers – which means higher profits for contractors! Plus everything runs smoother than ever before!
This blog post will give you 10 tips on how to do just that!
Let’s dive straight in!
1. Payments & Cash Flow
You should always pay attention to the exact date on which your application for payments is due. Missing an application date will cause you to potentially miss that month’s stage payment.
Ensure that you have provided backup for the application including daywork and variations.
It is important to ensure that your payment terms are clear with the contractor, subcontractors and suppliers. Ensure you have a good cash management process in place on site so there is enough money for unforeseen events such as delays or variations.
The construction industry has been one of the most vulnerable industries when it comes to cash flow. Make sure you have a company cash flow management plan in place to ensure that during the construction, there is enough money for unforeseen events such as delays or variations and also make sure your contractor has an appropriate credit limit so they can do work on-site without waiting for payment from their customers – especially if it’s not getting paid this month.
2. Contracts
All construction contracts need to be reviewed in full prior to signing and it’s vital you understand the main points to consider if you’re given a JCT contract.
A JCT sub contract is an agreement between the contractor and sub-contractor for construction work.
It sets out how the work will be carried out, what materials are to be used, when payment should happen and who is responsible for any problems that might arise during the course of construction. Items to review are the dates for starting the project, duration for completing the work, the scope of works to be completed & the contract sum, to name just a few.
3. Variations
One of the most important parts of managing a construction project is to manage Variations or change orders. Change orders are common in this industry and can be tricky, so I’ll explain what they are and how you should deal with them.
These variations will come from the main contractor (your client) and can range from a change in start date, quantity of work to be completed all the way through to a change in the material being used and how it’s built.
It’s important to follow these changes with the appropriate documentation in order to ensure that you get paid for all your hard work.
4. Programme & Delay
A construction program is an essential part of any project. It will help you keep everything organized, make sure that all the work has been done according to plan and avoid delays in implementation.
It’s important to keep your construction program up-to-date and accurate.
While construction delays are a common occurrence, they’re also preventable.
For those of you who don’t know, there are many different stages involved in construction and each stage has its own set of issues that can lead to delays. Some examples include:
- Inadequate planning for site work
- Poor communication between design team and contractors
- Weather conditions (too hot or too cold, normally too cold!)
- Poor quality materials.
5. Project Management
Different project management software can be used for different steps of the process, so it’s worth investing in one that suits you best. It may take some time to find a system that is user friendly enough but will help make sure everything runs smoothly.
When it comes to construction project management, there are a number of key considerations you should be making early on in the process:
- Developing realistic timeframes and budgets from the outset.
- Putting together a team with all necessary skillsets.
- Dealing with issues as they arise and controlling your risk levels.
- Minimising the impact of unexpected events.
It’s also important to ensure that you have a good overview of the whole project, in order to make sure information is communicated effectively and everyone knows what needs to be done. This might take some time but will help save on costs further down the line as it avoids delays due to misunderstandings or lack of communication.
6. Communication
If you’re a subcontractor in the construction industry, you probably already know how hard it is to keep up with the progress and issues on site. One of the best ways to stay on top of everything is by making sure that your communication skills are up to par.
Constant communication that is efficient and gets to the result quickly is vital.
The best way is normally the simple way:
- Start with email if you have to, but if the message isn’t understood by you or the other person then…
- Communication either face to face or via phone call where the context can be understood properly.
- Back up the conversation with an email if you have to.
7. Quality Systems
One of the most essential steps for establishing a successful construction company is to set up quality management systems. This will help you keep track of all your projects and improve their success rate.
This will also help you to save money in the long run because by investing in quality management systems from day one, it is less likely that things like expensive and costly re-dos or time consuming repairs will happen.
It’s really important for construction companies to have their own set of standards which are completed with care and detail. The best way to establish these standards is with the help of a both management and the trades completing the work.
When it comes to construction, there are many things which need to be done correctly from start until finish. If any one thing goes wrong then the end result will not be as good or look as professional as it should.
8. Lead Generation – How do you win work?
If you’re a subcontractor in construction, one of the most important aspects to your business is building and maintaining a client list.
It can be hard to build a client list when first starting your company however, this turns into managing your connections and assessing the main contractors you’re willing to work for on a regular basis. Some of the aspects to consider would include their pipeline of work, previous performance of projects, payment terms and the timing of payments.
9. Estimating
Tendering and estimating is probably one of the most important parts of building a business.
The problem can be that the process of tendering and estimating can be time consuming, confusing and often inaccurate if not done properly.
This results in a lot of lost business for construction businesses, as well as higher costs to their clients when they have to go back and re-do work.
Knowing your preferred size and type of project, the scope of works, areas you can always provide savings to the client and your base cost for each element of work can mean less time spent doing estimates manually or working out how much you should charge for each task, more time spent building your business while saving money at the same time!
10. Knowing your KPI’s
Most construction businesses are not aware of the Key Performance Indicators for their business and the problem is, you don’t know which KPIs matter the most.
Which ones should you focus on? How can you track and measure them all effectively?
Having these KPIs in place will help you to review, iterate and improve your business.
It is vital to take some time to understand, create and share your KPI’s with anyone on your team or organization. You can also track how well each area is performing against its targeted goal. This gives everyone on the team a clear understanding of what needs to be done better next time around!
The extra bonus – Keeping Records
It’s not uncommon for construction business owners to make the mistake of thinking that they don’t need to keep good records. Unfortunately, it is a common misconception and can lead to major problems.
Keeping good records is vital in any business, but with construction there are several additional reasons why this is so important.
One of the most important reasons is that keeping records allows you to identify problems in your construction project at an early stage, and take action before it becomes a big issue. Keeping good records also helps protect both yourself and your business from any legal issues.
And Finally
We’ve run through a number of the key areas you need to control and master to lead your project and construction business through the tricky waters of construction. This is just a summary of the hot topics and in future blog posts we will be diving deeper into the main topics to explain in more detail the frequently asked questions (FAQs) and the large problems you have to overcome.
In conclusion,
it is imperative that construction businesses keep good records of their project because it will prevent them from making mistakes, increase the chances of success and make any legal disputes less likely. Construction companies need to have better communication with clients so they can be more productive as a company. In order for this to happen both parties must trust each other in order.
We hope you will join us for future posts as we cover these issues in more detail. See our guide produced How to read a Construction Contract – A Quick Guide
In addition to this you can find out more on an alternative way to improve your projects by learning What is Lean Construction?
