Who Else Wants More Profitable Construction Projects?

Construction is a tough industry and many construction companies are facing difficult times. Yet there are always some companies that are growing and increasing their profits. How do they do it? Are they lucky?
Construction shouldn’t be about luck. Sure we sometimes appear to have projects that appear to be luckier than others – projects where the sun seems to literally shine. However, managers of successful projects and companies create their own luck. They get the basics right.
My book ‘Building a Successful Construction Company: The Practical guide’ focusses on improving profits in construction companies. Below are some ideas that come from this book:

1. Price your projects correctly – This includes reading the pricing documents carefully and understanding what’s in your scope of work. Check that you can deliver the project safely and to the required quality in the time the customer demands. Don’t commit to a project when you don’t have the necessary resources or skills to construct it, or one that has an impossible duration. Rather, price a few chosen projects carefully, and don’t use use the ‘shot-gun’ approach of pricing as many projects as possible hoping you’ll win one. Visit the project site to ensure you have allowed for any problems or obstacles that may be encountered during construction. Understand the project risks and ensure they can be managed or are allowed. Develop new strategies of how you’ll win the project and deliver it successfully and profitably.
2. Reduce wastage on your projects – There always seem to be inordinate amounts of waste materials hauled from our project sites. Not only is there the original costs of the material but the costs of loading, hauling and dumping the waste is large – and dumping costs are increasing every year. Some of this waste is generated by poor quality work and construction errors which results in completed work being demolished and redone. Some waste is generated by poor handling of materials resulting in breakages. Often though, project teams over-order materials, order the wrong material, or don’t optimise the size of materials resulting in excessively large off-cuts and wastage. When you order materials take some time to ensure the quantities are correct, they’ll be packaged and transported in such a way to minimise breakages and so they’re effortlessly off-loaded at the project, and that you’ve ordered the size that will easily be handled and have the least amount of cutting and waste.
3. Improve productivity – Construction projects are notoriously for low productivities. I’m sure we’ve all witnessed people and machines standing idle on construction projects. Poor productivity can be due to a number of problems including:
   1. The crews not working the hours they should – they return late from rest breaks and stop work early before the end of the shift.
   2. Poor planning resulting in people waiting for equipment, materials or access to their work areas.
   3. Having too many resources on the project, or the wrong type of resources.
   4. Poorly skilled and trained workers work slower and often produce poorer quality than skilled tradespeople. Training your people is the best investment you can make.
4. Ensure you claim for work completed – I cannot believe how many contractors don’t claim for additional work they’ve done or don’t claim for items that the client was obligated to supply but didn’t. Part of this is because the contractor’s manager hasn’t read the contract, hasn’t looked at what was priced, or isn’t aware of what work has been performed on the project. Sometimes it’s because the project manager is of the mistaken belief that the client will be upset by a claim for additional works or delays. (My next book focusses on construction variation claims.)
5. Finish your projects on schedule – When I mean finish I mean 100% complete with all documentation handed-over and all snag lists (punch lists) completed. All too often I encounter contractors still working on projects long after they should have been completed. To ensure the project is completed on time use a properly prepared schedule which is regularly referred to and updated. Ensure the construction team understands the schedule. Complete documentation and punch listing as the project progresses so these items aren’t left to the end.
6. Negotiate with suppliers – Negotiate with your suppliers and subcontractors to get the best rates and payment terms. Ensure that they are paid on time so that payment discounts can be claimed. Always get more than one quote, preferably three, so you can check the prices you’ve received are competitive.
7. Ensure your invoices are paid on time............

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'Successful Construction Project Management: The Practical Guide'
'Building a Successful Construction Company: The Practical Guide'
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