With the USA being the world’s biggest economy and with the potential for a $2 trillion infrastructure project being put forward by the government, the outlook for construction is looking promising. With this opportunity comes both the risk and uncertainty of starting up a construction project, both big and small. These 5 tips are here to help you start your construction project and make it a success.
Tip 1. Put Together a Strong Team
In any project you undertake, the people that you have working with you are the key to success. With construction, this statement is even more valid. When it comes to preventing accidents, keeping people safe, and having the work done up to your standards and on-time, having a well trained and motivated team is key. Before you can even consider going forward with a project, no matter how big or small,assembling a team behind you should be the first step to success. This doesn’t just include your on-the-ground team of laborers, construction managers, and skilled trades workers, whether that be through an external contractor or in-house, but also your office team. This can include estimators, accounting personnel, and risk managers, who are all crucial in successful planning and operations. Because your team is important, it makes growing the number of construction sites you operate at hard, until you can confidently expand your team. Suggestions for how to build out a team include:
- Networking with people you know in the field
- Creating job postings websites, than conducting interviews and reference checks
- Reaching out to local Union Halls, especially for skilled workers
Tip 2. Be Proactive
When looking for project opportunities, it’s important to be proactive in your approach. This can include getting in touch with your industry contacts and reaching out to contractors, designers and investors. When it comes to finding and starting a project, getting your resources in-line before searching one out is also crucial. Rather than starting a project before lining important resources up, including loans, getting these resources ready before starting allows you added visibility and credibility.
When it comes to the permitting side, being proactive is key. This includes submitting designs as soon as possible, to working with local and state officials to get the project off the ground.
Tip 3. Establish a Firm and In-depth Budget
When planning for and starting a construction project, it is important to map out all your costs and be aware of everything. This is so important given the low margin and competitive nature of the construction industry. Whether it be the costs to rent certain heavy equipment, to the cost of your staff spread across the whole job, to the cost of your construction loans, it’s important to have everything planned in advance. By starting with a firm budget, it allows you to hold the designer to a budget that you will be able to plan your profitability around. As well, with many external contractors offering fixed contracts, it gives you the ability to plan your outflows with your construction loan, helping you calculate the construction loan payment and interest you will pay over time. Finally, with a firm and in depth budget, it can also give you the added visibility and foundation to manage variables that could change and are out of your control. This especially includes the prime rate on your loan.
Tip 4. Set a Reasonable Time Deadline
There is always an incentive to have the project completed as soon as possible, with interest being paid on the construction loan, and wanting the ability to pursue other profitable projects. However, it is important to set a reasonable time deadline so that you or your contractor won’t be motivated to cut corners, which can make the project not up to the quality standards you want to be associated with. As well, by over-assessing how fast the project can be completed, it may lead you to be overly aggressive in your pursuit for another project after the one at hand is scheduled to be complete. This could lead to an overextension of resources and time should the unrealistic deadline not be met.
Tip 5. Spend Time on the Construction Site
As an owner, it is crucial to spend time on your construction site, interacting with employees both on the ground and in the office frequently. Besides the importance of checking progress as the project goes forward, spending time on the site will allow you to build employee morale and to help spot problems before they can have a larger impact. As well, being on-site will help you to learn more about different areas of a project, which this newfound experience can help when it comes time to engage in another project later on. Finally, by being on the ground it allows you to be ahead of any potential safety violations and potentially dangerous procedures, both protecting your staff from harm and yourself from potential fines and litigation.
No matter what type of construction project you’re planning on pursuing, these 5 tips are important to remember and helpful reminders to reduce the risk of your construction project and make it a success.