Don't Break the Bank

How to avoid job cost overruns

Sometimes remodeling projects go over budget due to estimating errors. It’s a fact of life. Many things can drive up costs beyond the original estimate, which means someone has to come up with more money at the end of the job. This is the most common cause of disputes between contractors, subcontractors and homeowners.

To avoid these issues:

  • Identify all hard and soft costs. This is especially important if the project is wide in scope. Omissions to an estimate can hurt you financially as well as your reputation.
  • Double-check material and labor costs. Know exactly what prices you will be charged and how long those prices will be honored. If you give an estimate in June, and the work doesn’t begin until August, make sure the costs have not increased. If so, submit a new estimate before any work gets underway.
  • Have clear plans. Fully understand and document the scope of a project. Disagreements arise when there is no plan to reference. Don’t rely on memory. It can result in extra, unpaid work and frustration for everyone involved.
  • Expect the unexpected. A thorough investigation of a project will help determine an accurate cost. However, hidden conditions may arise including undetected water or insect damage. These can be expensive and time consuming issues to resolve. Prepare clients for any potential situations that might be brought to light as the work gets underway. That way you aren’t left holding the bag.

BuildingAdvisor offers a free, downloadable estimating and budgeting spreadsheet. It can help simplify the estimating process and make sure nothing falls through the cracks. This leads to a more organized business approach and future success.

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