Home renovations are one of the biggest revenue-earners for builders in the US. However, if we look at it from the perspective of a client, few undertakings are as expensive or as stressful. In short, a positive cash-earner can easily turn into your biggest nightmare.Home renovations are construction projects that are governed by complicated contracts and complex relationships.
As a contractor and builder, you are responsible for coordinating the work of dozens of subcontractors, suppliers, and laborers. At times, the services of architects, engineers, interior designers and other consultants will also have to be coordinated seamlessly. For a home renovation project to turn into a success, so many things have to go right. And it also goes without saying that all types of risk need to be managed and limited. So today, we’re listing down some tips on how you can mitigate the risks involved in home renovation projects.
1. Understand the Types of Risks Involved
The first and most common type of risk that you have to watch out for is Financial Risk. This type of risk involves going over-budget or being pressed to do so much with a very limited budget. Take note that budget overruns are often brought about by poor planning, improper coordination, and inaccurate pricing. So what’s the end result when you fail in budget planning? For one thing, you will have endless arguments with the client, you may have to cut corners, or worse, you will have to shell out money from your own pocket just to deliver what has been promised.
In addition to budget risks, there are also risks when it comes to time and scheduling. This involves over-promising and under-delivering. Home renovations often have a limited time frame. In fact, it’s often rushed! Scheduling problems are brought about by poor coordination. The thing with scheduling problems is that it literally costs money. This might delay payments from the client and at the same time, steal valuable time that you may have otherwise spent on other, more lucrative, work. Remember, as the contractor and builder, cost control and proper scheduling should be part of your core skills.
2. Assemble a Killer Construction Team
You can assess the prowess and experience of a leader by analyzing the type of team that he or she assembles. When doing home renovation projects, it’s essential to create the right mix of experience, size and value. Every project has its unique requirements and specific obstacles (budget, design, existing architecture, client preferences etc.) so you really have to allot some serious thought process into creating the best team for each job. Assess whether or not you have the necessary manpower and equipment for each task. If not, figure out to whom you should outsource what you lack.
3. Define Your Build Strategy
The construction industry is highly fragmented and as a builder, you have to seamlessly integrate both the product sellers and the service providers. You also have to clearly set a timeline for every single task that will be done for a renovation. From consultation meetings to purchase dates, follow-ups to specific build milestones, all of these have to be laid out even before the project officially begins. Don’t forget to take into consideration, the specific characteristics and living arrangements of your client. (Will you have the entire place all to yourselves or does the renovation involve just isolating a certain part of the house?)
4. Be Professional in Monitoring the Construction Process
This is where you really have to dive into the details. Are the workers up to par with your standards? Is excellent craftsmanship being implemented? Are you compliant with all permits and regulations? Is the budget on track? Are all parties involved being updated with the status of the build? Maybe it’s time to go digital and use a construction scheduling software such as SAM – The Superintendent’s Automated Manager? Paper calendars and lists can only go so far. If you’re handling several builds at a time, you need to amp it up with the right technology. Click here to know more about SAM and how it helps builders in managing several projects at a single time.
Remember that as your business grows, your projects will get more and more complicated. But there lies the excitement of being a builder. So whether it’s a home renovation or a build from scratch project, you need to be on your toes and work your very best. After all, you’re building not just houses, but actual homes.
