10 Reasons Why Your Builder Is Losing You Money
Updated: Jan 24
Could your builder be losing you money?
Unfortunately some Sydney builders lose truckloads of money for their clients all the time on construction projects.
The question to be asked in these cases are; when did the builder realise the project was in trouble and what actions did they take. Could they have reduced the losses by implementing better construction policies ? Of course equally important is what actions should be taken to prevent you losses in the future.
Reasons builders lose money
There are many reasons for projects losing money. These may include:
Low worker morale
Poor management and planning
Ordering the incorrect resources
Poor quality work resulting in re-work and delays
Suppliers and subcontractors submitting claims for materials or work they haven’t provided
Suppliers not delivering the quantity of material claimed on their delivery documents
Overpayments to subcontractors or suppliers
Delays directly attributable to the customer
Additional work requested by the customer
Work being included on construction drawings which wasn’t in the original scope of work and wasn’t included in the contract
It’s important to investigate the reasons the project is losing money and not focus on the first and most obvious excuse. Your builder shouldn’t be focussing on finding an excuse for the loss, but rather be looking for the cause so that appropriate action can be taken to prevent further losses and, if possible, to recover the money lost.
Of course the fundamental lesson is to prevent losses occurring in the first place.
This is done by ensuring the project team gets the basics right – which includes:
Adhering to appropriate BCA construction standards
Resourcing the project correctly
Ensuring there are financial controls in place
Ensuring only the best contractors
Checking that the project adheres to best quality requirements and that a quality control system is in place
Preparing a realistic home construction schedule which completes the project in the shortest possible time making the best use of the available resources
Pricing the project correctly
Don’t wait until your project is in serious trouble before realising it is losing money. When a loss is discovered take the correct actions to stop the loss.
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