Seven ways to cut costs on construction projects

March 10, 2017

7 ways to cut costs

Wastage and excess expenditure are the onsite nightmare of everyone involved in the construction process.

We’d all love to streamline workflows and cut costs onsite but implementing measures that save time and money can all-too-often seem as complex and cost prohibitive as simply hoping for the best on a job-by-job basis.

However, building within a budget is essential if your business is to be successful. It’s also vital that you’re proactive and on the front foot when it comes to putting in systems and strategies that stifle over-spend and mean you don’t have to find more money when a job’s underway.

Here are seven key ways you can keep overspend in check and complete projects on time and within budget.


01 | Estimate your costs from the outset

estimate your costs

At the outset of any project, while you’re still in the prebuild phase, it’s hugely important to ensure your estimates are accurate and thorough. Accuracy is crucial and mistakes at this early stage can result in serious financial fallout as the project progresses.

The only way to guarantee precise and flawless estimating is the use of reputable and high-quality estimation software. With the right software tool in place, you’ll be able to make correct estimates, perform digital take-offs, manage bid processes and generate comprehensive reports.

Estimation software is now extremely sophisticated and it’s possible to select a product that fits your business to a T. Instead of cover-all, one-size-fits-all solutions, you can now invest in a product that directly meets the specific needs of your business. An increased trend for fixed-bid contracts and growing competition in the market place, make accurate estimates more essential than ever. The more tailored software is to your individual business needs, the better. With the right software, estimation and for take-off will definitely help you save time and money on every job.


02 | Identify risks and uncertainties early

identify risks

Identifying risks and highlighting uncertainties early on is vitally important. It will save you a considerable amount of time later in the project and we all know what time equals. It’s really important that any identified risks are assigned both cost and time implications. To not do so makes it a lot harder to analyse their potential impact on project outcomes.

It’s also worth remembering that uncertainty is not the same as risk. Uncertainty concerns circumstances or events of which little is known whereas a risk is the fallout from an event the likelihood of which is dictated by statistical probability. Both however, can prove costly if they aren’t identified and, where possible, mitigated!


03 | Open the lines of communication and keep them open

open communication

Developing long-term relationships with contractors and suppliers can be a real money-saver on projects. People aren’t going to shy away from repeat business and are willing to negotiate on price and deadlines in order to ensure they’ll be used on future projects. Even though margins are tight in the industry, almost anyone will be open to negotiation as long as they can see an advantage in the bigger picture.

Negotiating and getting the best rate from suppliers and contractors is one of the most common ways of cutting overhead costs for your business. It also enables you to build up a relationship where mutual trust, respect and quality can be counted upon time and time again.


04 | Get a handle on materials management

materials management

Not everyone is aware how vital materials management is to cutting costs on the construction site. In fact, all-too-often contractors are willing to write off a portion of the expenditure associated with the most damaging aspects of, to put it simply, not knowing where their tools are.

Ineffective materials management costs money in a variety of ways, not least the following:

  • Replacement cost & tool budget control
  • Service & maintenance inefficiencies
  • Replacing items instead of servicing them
  • Difficulty keeping up with service paperwork
  • Accountability, or more succinctly, knowing who is responsible for what
  • Field employees not keeping up with paperwork.
  • Inability to locate inventory in the field or the warehouse
  • Employees hoarding tools
  • Productivity Losses

In real terms this equates to asset managers spending around 90 minutes a day just looking for tools, a further two hours a day keeping up with paperwork while field employees wait for the right tool to complete their task.

Thankfully, materials management solutions do exist and, while getting on top of so many challenges simultaneously might sound like a lengthy and meticulous task, if you look for a solution that’s simple to use, as well as effective, you’ll achieve ROI rapidly and without too much initial outlay in either time or cost.


05 | Take steps to avoid the need for rework

take steps to avoid rework

Rework is not only exceptionally costly it also results in late delivery and, often, creates tension between the different stakeholders involved in a project. In the worst case scenario, it can lead to litigation and even damage a firm’s reputation and their ability to win new work.

Preventing (or at least minimising) the need for rework is one of the most effective cost-cutting measures you can put in place. Fortunately, technology and changes in the way the industry is working make this, theoretically at least, a simpler process than ever before.

No matter how skilled your workforce is, working by rules of thumb, setting-out manually and the guess work of working on complex retrofit projects when you don’t know what to expect are all prone to error.

Technology and the processes it has facilitated, such as BIM, mean that it’s now possible to be far more precise in each of these (and other) areas. While changing the culture of your business away from the ‘traditional’ way of doing things into one fuelled by the collaborative philosophy underpinning BIM may seem like a challenge, the added accuracy will pay dividends. Similarly, although a robotic total station (RTS), 3D scanner or cutting edge design and detail software might feel like a hefty investment, as these begin to negate the need for reworking, you’ll soon reap the rewards in terms of time and cost.


06 | Hire versatile staff who can comfortably multitask


Staff who can undertake more than one job are priceless and achieving optimal productivity from every employee is a guarantee of success. During the hiring process, look for workers who can fit into multiple roles and can manage several tasks at once. With a versatile team you can get more output with less input. Also, treat your staff appropriately. View our top tips for a happy and productive workforce here.


07 | Deliver on Time

delivery ontime

The completion and delivery of a project on time is crucial to cutting costs. Inevitably, falling behind schedule means more payments to third parties, which in turn leads to extra costs. It will also affect your reputation eventually. As a result, you’ll find it increasingly difficult to win more work and regular clients will stop using you and defect to your competitors.


We are working in a time of considerable change in our industry but this shouldn’t be viewed as an obstacle to cutting costs onsite. Happily, developments and innovations in technology provide ideal opportunities to manage and take control of construction expenditure.

Far from being difficult to implement and operate, many such solutions are designed to be outstandingly user-friendly. They’re also, typically, designed by industry professionals who intrinsically understand the day-to-day needs of contractors in the field.



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