Navigating the maze of costs for a large-scale project can feel impossible. With many moving parts and competing priorities it’s hard to stay on top of finances, and unforeseeable issues can interrupt the best-laid plans. Cash flow can also be a challenge if you’re relying on timely payments from the customer. Knowing how to minimise financial roadblocks and manage them should they arise can save you significant headaches and ensure that your project stays within budget.
Why can costs go off-track?
Unpredictable costs often sneak up on you during a refurbishment, and with larger projects these can be astronomical. They can come from anywhere too, including changes to UK building regulations, revelations regarding the building’s infrastructure and shifts in market prices for essential supplies.
While these problems aren’t always visible during the planning stages, having an awareness of what could occur will help you spot problems sooner and set aside sufficient contingency funds to cover unexpected costs. Understanding the root causes also enables you to manage spiralling spending more effectively so you can get a grip on it before it’s out of control.
Other common culprits for budgets going off-track include poor communication and collaboration, delayed products and payments through the supply chain and timeline pressures exacerbated by uncontrollable external factors. Staying on top of your project admin and giving yourself a bit of breathing space can make the world of difference in managing your finances.
4 tips for smarter budgeting
- Securing essentials in advance
It’s common to experience price hikes during the procurement process, whether due to project delays or global issues such as supply chain disruptions. Locking in essential purchases early on helps mitigate the risk of being hit with higher-than-expected costs when buying the essentials.
Planning ahead also gives you more time to research suppliers and compare prices so you can secure the best deals. You can look for boilers for sale and other key elements you’re confident will be needed such as pipework and underlay. Consider the tools and essential PPE equipment required too.
- Working with experienced suppliers
This is one of the most important decisions you’ll make, in terms of budgeting and the overall quality and efficiency of the project. Suppliers experienced in large-scale refurbishments can bring invaluable expertise to the table in addition to the right products and people.
In general, building relationships with seasoned suppliers helps reduce long-term costs. They’re more likely to offer better warranties and after-sale services and more flexible payment terms to trusted partners. You can also work together to make fast, informed decisions should issues arise, keeping refurbishments on track in terms of budget and timeline.
- Balancing bulk buying
A common strategy for saving money, bulk buying is a double-edged sword. The discounts on large quantities of materials can certainly help to reduce your overheads but overestimating how much you can use leads to costly waste. Finding somewhere to store piles of stock can be an expensive challenge in itself!
Overbuying will also eat into your funds and could leave you unable to buy essentials or pay sudden bills further down the line. Ensure you’re only buying large quantities of materials you use often and try to estimate how much you’ll need as accurately as possible. The key to making the most of bulk discounts is balancing immediate needs with long-term consumption to overspending.
- Thinking beyond the basics
When most people think about the cost of a refurbishment, they focus on labour and materials, but significant costs can lie in often overlooked areas like legal fees, insurance, permits and project management. These hidden expenses can quickly eat into your budget if you’re not prepared. Make sure to account for these potential costs during your planning stage to avoid being caught off guard.
Spending on proper project management is vital. Coordinating timelines, managing risks and ensuring that all work is done according to plan is instrumental in helping you stay on track with spending. While you may feel tempted to cut costs here, investing in a skilled project manager can save money in the long run by keeping the entire process running smoothly.