Builders Cut Construction Costs to Protect Profit Margins

We all feel a bit out of control in this slipping economy. As the cost of materials goes up, it seems that everyone wants a break. However, this can cut into the profits that you, the builder, earns. One way to gain control is to battle shrinking profit margins and cut and control construction costs.

How Can I Cut Construction Costs?

There are many ways that you can cut your costs and increase your profits. One of the best ways to do this is to first make sure that you know exactly what your customer wants. Design homes that target your customers needs, not yours. In addition, make sure that you get sign off on each and every item to avoid any misunderstanding. By doing so, you will avoid delays and cost from rework as well as keeping your relationship with the customer in tact.

The next thing to do is look at the standard specifications offered in a home. Are there things that might be made optional? By truly looking at your standards and understanding where they fall in line, how much detail they require, and if they are absolutely needed in the standard home, you may actually save yourself some money when it comes to construction costs. Analyze whether a standard is included on each level of the home. What is standard for the kitchen may not be necessary on the second floor. By having a more basic standard list, you could save money overall per home.

Spend time up front making sure all project documentation is detailed so that any superintendent or contractor that read the documentation has all the information they need from the get go and there is a decrease in the need for rework. You may also consider including your superintendent and contractors in the development of the working documentation so that they have input to streamline the construction process. Treat all members of the build-chain as a team - this way communication will be open throughout the building process and all will feel more accountable thus improving the quality of the resulting home.

Now, you should also be auditing your estimating procedures for the homes you have built. Conduct an analysis to compare what was actually spent on the home to the estimate that you provided to your customer. This can help in two ways. First, it will help improve your estimating skills. If you are realizing that you are underestimating your costs to the customer, you can make the proper adjustments in your estimating procedure. At the same time, it can help you identify any problem areas that may exist in building.

Finally, you want to consider surface protection. Surface protection is necessary to the builder for many reasons. For example, if you have to store materials such as tubs, doors, floors, or counters on site, you want to make sure that they are protected from damage. If any item becomes damaged, it is likely the manufacturer will not take it back and you are out that money, but you will still need to purchase one for the home you need to build. Request that your contractors protect all material when delivered and installed at the jobsite. Protect surfaces such as tubs, doors/jambs, counters, cabinets, and floors to prevent damage from contractors during the building process. Protect tubs and toilets from usage as trash cans or, well, toilets. Protect vents and use dust control systems to reduce clean up costs.

While you may be feeling the squeeze on your profit margins from dropping home prices and a sluggish economy, you can take action to cut the cost of construction to maintain, even increase your profits margins. Making small, simple changes throughout the build cycle can really add up by the time a home is built.

Blake Products Surface Protection Center gives you a cost effective way to protect all your finishing trades. Our products are reusable, recyclable and reasonably priced. Our line of surface protection products are made to withstand the rigors of job site traffic and many of the products are produced as a green building product so they are environmentally friendly.

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