What are the Most Common Reasons
Commercial Developments Go Over Budget?
Runaway projects are a nightmare. Everyone is running around putting out “fires” to stop the hemorrhage of cash being injected into your project. Fingers are being pointed and everyone is stressed. There is nothing worse that dealing with the aftermath of dumpster fire. Let’s look at some common reason why projects go over budget and some preemptive strategies to keep your project running smoothly.
- Projects have budgets and working in teams often disperses that responsibility. One person has to own the budget. The Project Manager needs to be accountable for the budget and provide regular updates to the client and team members.
- Unclear project scope and goals. Project scopes need to be well defined and understood by all stakeholders. Proactive engagement with our clients and all team members will make the project run smoother. No one wants a runaway project.
- Poor estimates or downplaying the amount of work that needs to go into a project. Subcontractors might be undercutting their price but their work may be poor quality or they underestimated the project scope. This happens quite frequently. We have had a number of clients who don’t understand the scope, hire someone cheaper only to find out the bidder undercut the price as bait.
- Construction delays. We know you wanted it done, like yesterday! Our Project Managers will collaborate between design, project management and on-site construction to minimize construction delays. Deadlines will be realistic without compromising the end product.
- Unforeseen costs. Material costs have gone up significantly over the last year. Material and labour shortages. Too much or too little topsoil. Inclement weather. Excessive groundwater. Doing some upfront work such as a Phase One Environmental Site Assessment will minimize unforeseen costs.
- Lack of communication. Clear concise communication and transparency are essential ingredients to any successful commercial development Weekly meetings with key team members will pay off significantly in the long run.
- Contingency Plan. The problem must be identified and then the team must recalibrate.
Having the right design and execution team in your pocket is essential to project schedule and budget. As seasoned Project Managers, we have a variety of risk reducing strategies to make sure your commercial development doesn’t run off the rails. We are passionate about commercial development and want to hear about your project!