CONSIDER THIS BEFORE YOU START ON YOUR BUILDING PROJECT
A Building project is a very exciting activity once you have made up your mind to go for it. It has what we could call a 3-Level emotion phase. First, you are very excited during the planning phase with the anticipation of having a new structure or feature added to your property. The second phase is rather on the down side which entails stress and frustrations during the construction phase. The last phase will be fulfillment and relief from pressure once the project is completed successfully.
Knowing and understanding how much a project demands from you the owner, is paramount to your decision to embark on your construction journey. Many times; project owners overlook the challenges posed by each unique project and forget that each project comes with its own unique risks and challenges. This has seen many project owners having fall outs with their contractors, resulting in delays and sometimes a complete halt to projects and prolonged litigation battles; further adding to loses for the project owners and contractors.
The major considerations every project owner must understand before deciding on a project are as outlined below:
1. UNDERSTANDING THE ESTIMATE VS ACTUAL
One most important aspect of each project is the budget. As a project owner, you should understand that an estimate could only remain an estimate and could never be cast in concrete as a final budget. This is why it is very important to include a contingency amount normally around 5 – 10% of the project budget estimate. This would be used to cover extra costs that might have been left out or omitted during the estimation phase. This contingency amount also helps to cover change orders and alterations to original design. Having this in place ensures that your project budget is as accurate as possible.
2. UNDERSTANDING INFLATION IMPACT ON YOUR BUDGET AND PLANNING
For projects that span over 3 months, it is very important to understand that material (hardware) prices may change at any time of the year. Let us look at it, especially these days where recessions have become a common wave in the global economy. Evidently, the Russian-Ukraine war has exerted significant pressures on many economies around the world, especially Africa. This has seen increases in fuel, gas and basic commodities around the world. Construction has not been left out. Material prices have significantly increased as well as labour disputes between employers and employers. As a project owner, it is of paramount importance to understand how inflation and macro economics may affect your project. Having a professional team assist you in the planning of your project will prove invaluable in these instances. It should be noted that all projects regardless of size (new commercial project, residential renovation etc) suffer from the impact of changes in the economic environment.
3. UNDERSTANDING THAT SOMETIMES CHEAP IS VERY EXPENSIVE!
In my experience as a Director of a diverse construction company, that deals with a comprehensive service portfolio (engineering and construction), we most often deal with Remedial Projects. Very often project owners make the mistake of being excited over cheaper quotes from their selected contractors. Even so, some project owners further negotiate compromises on the project scope to bring the cost down to what they call “affordable”. Very often we ask how much it cost to have the “sub-standard” work done – and you would be shocked. We would say some prices are out right scams. It should be very clear to a project owner that no matter what, there are no short cuts to QUALITY WORK. Yes, we could negotiate prices down, but understand what items are you taking off the budget and whether they will impact on the quality of your project. Most often we have learnt that when someone is discounting something, they of course are taking away a higher value object and replacing with a lower value object. Keep this in mind. Many project owners have suffered 3 times the cost of a project due to shady workmanship. It should therefore be noted that very often CHEAP IS VERY EXPENSIVE – There is an opportunity cost here. As blunt and harsh a reality this may be, as a property owner, you must think hard about this factor. We always advise, get a professional team to assist you with your project from planning, through execution and completion and certification. Get the Engineers like Buildman involved. It will be invaluable.