But it’s vital to get this right before embarking on the contract. Effective cost planning will help to:
- Control costs
- Minimise extras
- Maximise profits
Early cost advice will help your client to understand the options, uncertainties and risks and provide them with far better value for money.
There are some simple steps to follow when developing a cost plan to ease the pain later on. We liken it to planning a long-haul holiday:
1. Establish the construction project parameters:
What does your client want from you and from the project? What will the building be used for? What materials will be used? What will it look like? In holiday terms, this is like deciding where you want to go and what you want to do while you’re there.
2. Set the budget
If you don’t set a budget for your holiday you might consider all-inclusive versus self-catering, hire car or trips & transfers, and what you need to buy beforehand? What is non-negotiable to ensure the quality of your holiday? Calculating budgets for building projects is, of course, a far more complex process but you need to itemise the requirements in the same way. Professional software can help, but it is vital to analyse all available information and make measured judgements.
For example, you may have a soil report, but need to allow a contingency for what you might find under the ground when you start digging. You will need to make weather-based calculations – depending on the time of year, you may need extra days to allow for frozen or waterlogged ground or high winds may prevent your cranes from operating.
3. Set cost targets and monitor them regularly
This will lead to fewer abortive costs/designs and help to minimise extras. Every time the project changes, cost up what the change will mean to the client. Early advice allows them to review and change specifications if the project is going over-budget. Think of this as the same process you go through when your airline changes your flight times and you need to book an airport hotel the night before.
How ProQS can help you
The most important reason for sound cost planning is to maximise your profits. If any element goes over-budget, can you use a lower cost option without compromising design integrity or increasing the risk profile?
For example, if using concrete, you may weigh-up pre-cast concrete – risking something being wrong when it arrives on site, causing delay and the cost of re-making it. Balance this against the logistical risks and costs of using in-situ wet concrete which involves co-ordinating more contractors on site.
If you wish to use the services of a professional quantity surveyor to ensure the efficiency of your cost-planning, call ProQS today to discuss your needs.
