Five ways to reduce the cost of commercial building construction

While undertaking a commercial construction project, there’re a lot of factors to consider avoiding cash leaks and budget overruns. Whether it is a restaurant, office, or shopping centre, cost overruns can result in a significant setback to your business and further ventures.

Construction projects can be affected by unforeseeable circumstances like extreme weather or forces beyond human control. However, these overruns can also result from project management issues – from schedules and improper budget setting to inaccurate analysis or planning. That’s where you need accurate estimates and better planning in parallel with using the latest technologies to undertake project management in innovative ways. The use of technology can not only help in reducing common planning errors but can also maximise efficiency and profits in construction projects.

This article will highlight some of the common reasons for project cost overruns and proven strategies to keep overruns at a minimum:

Plan accurate estimates

Commercial building projects are a bit complex compared to typical residential projects. However, planning is a fundamental activity in managing and executing all construction projects.

While most of the project’s stakeholders are eager to kick off the project, rushing through the planning phase can head your project for an overrun from day one. At this stage, you need to be pretty sure about the scope of work to be included in the project. You need to enlist all the amenities and components with detailed documentation, including layouts and design specifications.

While your scope is clear, you can increase your odds of landing on accurate estimates. While rough estimated costs are helpful for feasibility analysis, in the long run, it is vital to have a detailed assessment of all components and features of a commercial construction project.

So, try to do your due diligence in the preconstruction phase. Set realistic and accurate project estimates and deadlines for activities with due consultation with architects and contractors. Preconstruction planning can help identify potential issues before construction begins. The stakeholders at this stage can critically identify the problems with the process. It gives you a chance to eradicate any confusion between parties and make a solid project schedule to help appropriately allocate the budget.

Hire qualified contractors

It is tempting to offer work to the lowest bidder during bidding, but that’s not always the right decision. Your business doesn’t deserve cheap quality. Your selection for contractor or subcontractor can make or break your entire project. A well-reputed contractor will offer the best services, while a shoddy worker will give headache to even the toughest. A qualified and well-reputed contractor helps reduce material wastage and lets you make corrections in design as per field execution. A licensed contractor has a professional and hardworking team beyond your expectations.

So, while evaluating contractors, make sure to check their credentials and have an interview beforehand to access their professional aptitude.

Plan well for change orders

Another common reason for project cost overruns is change orders. A Change order is a modification in a construction contract that adds or changes the scope of work. In most cases, it increases the contract price and may impact the project deadline. So, the owner and the contractor must agree on all terms of the change order. For example, while renovating an office, the client observes the new flooring does not look good with the existing interior touch, so the change of flooring type will need a change order.

It’s not just the design errors that result in change orders, but sometimes you realise introducing new requirements or specs that were not in the original design. So, it is best to keep a margin in the project estimate for contingencies as a percentage.
Modern techniques like BIM (Building Information Modeling) or virtual reality allow you to simulate different solutions for scope changes and budget accordingly in the preconstruction phase. You can evaluate other solutions ahead of time to evaluate the level of functionality and visual appeal.

Anyhow, scope changes are always there, and it is best to manage their proactivity and execute them ahead of time to reduce the likelihood of cost overruns.

Avoid poor site management and waste

Materials make up a big chunk of your project cost. That’s why it is best not to waste material in the construction process and save money on materials. So, it is best to order the right amount of materials. You can engage experienced crew members who can plan and help ensure you get the right quantities of materials like concrete and lumber.

Use stock design and standard sizes

Using standard shapes and sizes of project components increases labour productivity and helps reduce wastage on site. However, everyone makes mistakes. That’s where project managers have to step in to get to the root of the problem. Otherwise, there are more chances of getting valuable materials ending up on the scrap heap.

Designers use standard and stock dimensions of the building for raw materials like lumber, plywood, steel beams, and drywall to minimise scrap and cutting. So, if you use custom sizes instead of the standard ones, you will have significant cut-off waste that will waste both money and resources. You’ll need time and labour to measure and cut components to custom sizes. So, it is always best to use standard sizes and pay less for solid waste disposal.

Call the experts

A contractor is always a helping hand to the client in saving materials and money. So, it is best to hire a reputable and experienced contractor who delivers quality craft and does that well in time.

At Grand Alliance, we’ve been helping our clients in London with their commercial building projects since 2008. We are a team of highly skilled and experienced tradespeople striving to deliver high-quality work.

Contact us for a friendly chat about your project. We’re looking forward to hearing from you.

Five ways to reduce the cost of commercial building construction