Construction, like any industry, has its own unique challenges. But coordinating the successful development or renovation of a building takes heavy foresight, planning and math. These are skills that help any business flourish.
After all, every business builds something…whether it’s systems, products, events or content, there’s a good chance your business relies on delivering the best quality of whatever you’ve taken the time and effort to construct.
We’ve had the pleasure of working with several construction firms since starting our consulting practice, supporting them with everything from CEO Soundboarding to implementing Operational Systems and helping them build a 360 degree Company Performance Assessment Tool for Human Resources.
Here’s the insights we’ve learned thus far.
Unsnag your punch list
The last 10% of a construction project often takes as long as the first 90%. That’s because in order for a project to be considered done, contractors must complete every item on the punch list.
The Business Dictionary defines a punch list as, “[A] document listing work that does not conform to contract specifications, usually attached to the certificate of substantial completion. The contractor must correct the punch list work before receiving payment.”
In short, these are small changes that need to be corrected before the client is satisfied with the final product. Sound familiar?
The last 10% of a project is ideally where all the individual pieces start to form a whole. Unfortunately, it’s also where problems arise in completing the last few punch list items that weren’t properly anticipated.
The solution here is to plan ahead. Your bottom line is to ensure the project is profitable for your company, so anticipating the punch list shaves off substantial hours from the final stretch of the project — which allows you to complete the project and move on to the next one.
Most importantly, it ensures you get the final payment with satisfied customers.
Have the end in mind from the beginning.
The start of a project may seem like smooth sailing, but it’s actually the opportune time to start preparing for the later, more complicated stages. You want your momentum to work with you, so it’s essential to prepare for complications while you’re in the serenity of the early stages of the project.
There are always surprises along the way but communicating thoroughly with your clients and setting clear expectations during these early stages will set you up for success. Successful construction projects — just like any project — are delivered under the expected budget and before the deadline.
Check items off as you go, and keep on top of every point — try to predict as many problems as you can before starting the work!
Mitigate conflict as early as possible.
Construction is a fast-moving series of conflicts and resolutions. Whether it be negotiating contracts with owners, solving unforeseen problems on the fly or overseeing all the moving parts of a complicated project.
Every industry may experience different conflicts, but all successful companies mitigate conflict ahead of time. This is best done by keeping an eagle eye on your financials and being realistic with schedules.
Write up a plan for your finances. Forecast week by week the working expenses of the project in painstaking detail. Once you’ve pulled the trigger and begun the project, make sure your forecast is similar to the actual disbursements. If they aren’t lining up, it’s time to revise your projections.
The pivotal piece: get the job finished before cash flow becomes an issue.
What are the items on your punch list?
Closing out a construction project effectively means having a good plan, budgeting for change orders, and staying ahead of your punch list. The vocabulary may be specific to the construction, but the lessons are not.
Determine typical “punch lists” for your industry. What are your opportunities to get ahead? How can you complete the last lap of your projects quickly and with quality? Remember, if you can get the last 10% done efficiently, you’ll be in front of virtually all of the competition.