Six ways to save your clients money

With the discussion about cost savings in residential building gaining momentum, there is pressure
on builders to deliver even better value

Rapidly rising house prices and first-home buyers struggling to enter the market are fueling the conversation around housing affordability. Here are six things you may be able to do in your business to trim the cost of a build. While each may only contribute a little, together they can add up to significant savings that can be passed onto clients, or used to improve your viability.

1. Create operational procedure manuals for as many tasks as possible.

For over a century, the Pareto principle also known as the 80/20 rule, from Italian economist Vilfredo Pareto’s observation that 80% of the land was owned by 20% of the population has been applied to almost every area of life. In construction, it suggests that 80% of one building project will be the same as another, and just 20% will be unique.

If we were to observe you on two building projects, we would see you use the same routines for 80% of the work. Why not document these routines to make it easier for newbies to get up to speed? Your team could follow these standard procedures until someone finds an enhancement, which can then be incorporated to benefit all future jobs.

What is even more powerful is that you can hire less skilled builders. Your procedures train them to do it your way – ideally meaning you won’t need to supervise as closely.

2. Develop a standard week of meetings

Record how often you and your staff are attending meetings, then ask: “what needs to happen to increase the time between meetings?”

It’s easy for project managers to believe they are doing important work, simply because they are attending meetings. However, do you/they need as many? Does your foreman need a daily visit?

I’ve seen builders save eight to ten hours a week by simply creating a weekly project management calendar, then gradually increasing the time between meetings. Start with missing a day, then two. Aim for a weekly visit. Of course, there will be exceptions, but it works around 80% of the time. 

3. Schedule workflow in detail

The first time I counted the number of subbies and suppliers in one residential building project, there were more than 40. I couldn’t believe it! Not many industries deal with such a large supply chain, so it can be a huge burden for builders. How many are involved in your current project?

To minimise the pressure and reduce delays, make sure that you (or your project manager) work through your next project well in advance. Plan the workflow schedule in detail and highlight the critical items. Tally the man-hours budgeted for each section, and create a simple table for your foreman to keep a running total against budget. You can then act immediately if it looks like time is blowing out.

4. Use a construction management program

Good software tools can make a huge difference to construction management by reducing supervisory visits, replacing paperwork, keeping track of communications, informing subbies and suppliers of amendments to schedules, tracking variations and providing a secure place for recording meetings.

If you have more than one build on at any one time, investigate using such a tool. These take time to master, so don’t give up too soon.

5. Keep sub-contractors up to date with delays

Workflow is interrupted and time is lost when subcontractors are delayed. Don’t let it happen in your business! Delays can be prevented by keeping subcontractors informed of your schedule.

Book them well in advance, and request that they confirm their availability. Warn them as soon as you know there is going to be a change, and ask them to do the same.

If you know early on that they cannot keep to the original schedule, you can intervene to protect your workflow. Construction management is all about communication – make it a priority!

6. Request delivery commitment from suppliers

Like subcontractor delays, supplier hold-ups can greatly increase the cost of a build. If the joinery is delayed for several weeks because the importer’s fittings are locked up in shipping, then lining can’t start and your team has to secure the site (at additional cost) before heading to another job, blowing out the budget for scaffold hire.