As a construction project manager, you typically assume all the responsibilities to plan, oversee, organize the project team, direct and allocate resources, control scarce resources, manage client expectations and ensure that the project is delivered on time and within the agreed budget. The project manager’s role is to be in control of all activities to make sure that the project is carried out effectively, efficiently and according to plan. However, to ensure this, there are many things to consider before starting a construction project. A pleasant experience can be achieved through research and knowledge on how to prepare for an upcoming construction project. This ensures you have all the information and resources needed to successfully execute the project. This way, you are able to avoid issues or be prepared in the best way to manoeuvre probable risks and unforeseeable events by putting the appropriate contingencies in place. This article lists out the most important things you need to know before beginning different types of construction projects.
The things to consider prior to starting a construction project
With the right amount of planning and research, ample time, careful attention, a strong team and the right resources at hand, you can be assured that the project will be delivered within the budget and on time. There is no better way to ensure all of these factors are available than through proper planning before executing the construction.
Here are some things to ensure before starting a construction project:
Come up with a detailed business plan
Every construction project needs to have a plan in place before commencement. The business plan establishes the appropriate roadmap toward the completion of the project. It should identify and define the project goals (deliverables) and requirements. A good plan should give you a clear idea of what exactly is required to complete the project. This includes basic construction plan, possible sites analysis, a comprehensive financial analysis, the name of the building (for commercial buildings) and cost-benefit analysis. This will help you to develop a realistic budget, design and complete timelines. Discuss with your client what they are looking for in the finished product. Consider funding, realistic time frames, financial opportunities, and other constraints associated with the project.
Choose the appropriate commercial location
The first thing to consider before starting a construction project is the site location with regard to the following: An effective project manager will think of opportunities and threats related to each site location. Potential opportunities or threats include land cost, access, proximity of suppliers, client facilities and transportation routes. The best place for an office or business would be a central area where facilities are within proximity to save costs and minimize time delays. Also, consider that the team members working on a project may be affected by certain characteristics of the site like traffic congestion, noise or pollution level, etc. Lastly, ensure that you are legally allowed to construct the type of project in question in the specific area before commencing the project. Therefore, consider the location of your project carefully when planning and researching before starting a construction project.
Research codes, laws and acquire zoning permits
Before starting your project, make sure to do thorough research on the government laws, building codes and common practices that relate to the project. Not all cities allow the same construction types in similar areas. To begin with, there are federal and state regulations that govern construction. Check with your local building code or municipality for building requirements and guidelines. Understanding these regulations will help you to know what permits are required and how much they will cost. The most important ones include zoning permits and building permits, such as safety standards for building materials, the use of lead-based paint, the cleaning up of hazardous waste sites and the disposal of chemicals, and the use of asbestos.
Zoning permits are vital in that they determine whether or not you’re allowed to construct the said type of project/structure in the identified site/location. These permits are obtained from the local zoning department and are succeeded by building permits that give the go-ahead for your project.
Permits allow inspectors to visit your building site and make sure that construction is being done according to code. These permits help you avoid violations and save you from legal consequences that might arise from breaking these laws by inadvertently constructing according to outdated standards or codes. Permits require payment fees and are subject to time restrictions for completion, so without proper attention, your project could be delayed.
Understand your tax requirements
Different construction projects are liable to different tax deductions and implications. The tax advisors, planners and accountants in the construction industry can help you understand the different tax laws or codes pertaining to your project. By involving these specialists, you can be sure that your books will be in order should an audit be needed after the project. When studying the details of this law, don’t forget to take into consideration that some taxes can vary based on your geographic location.
Understand your insurance responsibilities
Before commencing a construction project, you need to determine whether your business has insurance coverage in case of accidents and damages. Construction projects are subject to all sorts of insurance, and these requirements vary based on the contract, project location, and other factors. You can consult your insurance agent to determine the applicable insurance. In general, there are three types of insurance required: general liability, workers’ compensation and property insurance. Ensure the project owner and the business are protected.
Analyse market forecasts
When developing a construction project, you need to know how your project fits into the overall market forecast of the industry. Identify your competitors and determine if you can meet their standards. Factors that affect the market include consumer spending, consumer confidence, demand and supply, interest rates and taxation. Consider these factors to determine whether the construction project will be sustainable and profitable (for commercial projects).
Make a realistic construction budget
A construction budget is a detailed financial plan for the project. It will provide you with a clear picture of the projected expenses that are related to the project. Some of the expenses you need to consider are land, raw/building materials equipment (purchase or rent costs), labor (including contractors and subcontractors), transportation of materials, utilities (electricity, water), advertising, unforeseen expenses (contingency funds), insurance and permits or licenses. Having a construction budget helps in securing funds and resource allocation. The size and complexity of the budget will be determined by the size, design, scope and nature of the project. Consult suppliers to get accurate estimates of prices of goods and services.
Time is money. It is vital to establish a realistic schedule for the project as well as a budget that reflects all the costs. If your project overruns its schedule, you will definitely miss out on revenue opportunities and loss of client goodwill. The schedule should include the different phases of the project and be as detailed as possible. Estimate how many days it will take to complete each phase and the necessary resources needed for that particular phase. Decide on the start date of each phase and choose an appropriate completion date for each phase. Be sure to consider permits and licensing processing timeframes, ordering and delivery intervals, inspections, hiring process and downtimes in between breaks and a reasonable allowance. With this information, determine an estimated project completion timeframe. You need to ensure that you deliver your work within the agreed time and budget targets
Start raising money for your project as early as possible. Seek out construction loans from banks, investment groups, independent investors, and credit unions financing and start applying for them immediately. Construction loans are generally secured by either a lien on the property or some other form of collateral. The advantage of getting construction financing is that you don’t have to risk your own money; it creates a sense of security and long repayment periods, and you may have access to certain tax advantages. Normally, commercial construction loans will have interest rates ranging between 4%-12% with repayment periods of 10-20 years. A successful construction business relies on dependable finances that can help you sustain your business without any constraints.
Request bids from commercial construction companies
Next, after securing funds, you will need commercial construction companies to come in and start the project. Construction companies will have the required expertise, from structural engineers to architects and construction crews. To ensure you get the best company that suits your project needs, you request the companies to send in bids for the job. A bid is usually a written quote and proposal or a binding offer that is submitted by a prospective contractor in response to an advertisement for bids. Bids are generally solicited for commercial contracts and for construction projects on the owner’s project. The low bid (or price) may not necessarily be the best. Your decision to award the contract should consider other factors such as the contractor’s past performance, references, financial capability, performance warranty, structural warranties, references and on-time delivery record. Always hire a company that is licensed and insured because it verifies their credibility and assures you that they will handle liability claims for damages, negligence and defects in the end product. It is advisable to ask for at least three bids from different companies so that you can compare their prices and quality of service.
or hire an architect or contractor
Alternatively, you can opt to hire an architect or contractor yourself. You will need an experienced professional who has worked on similar projects before and will guide you on building standards, codes and regulations that apply to your project. The architect designs the building, and the general contractor builds the project practically. You should hire a licensed and insured architect and contractor in order to protect yourself and your client from liability claims. Also, consider the architect’s or contractor’s reputation as it will often reflect the quality of previous work. Request bids from several parties before appointing one. Ask for a 3D design of the structure and associated schematics. Then, consult the general contractor to determine what materials will be needed and the feasibility of the design. Do not rush the selection process; set aside 4-6 weeks of interviewing bidders before settling on one.
Line up the necessary equipment for the project
Buildings require different types of equipment such as bulldozers, trucks, diggers, cranes, generators and scaffolding. You will need to make sure that the necessary amount of equipment is readily available to build your project. For example, if you intend to use bulldozers in your project, you need to make sure that there are enough on hand.
Buy the construction site
Buying the decided construction site or plot will involve a detailed inspection/survey of the land, its surrounding area and taking a look at titles and deeds to ensure there are no liens on the property. If you’re planning to buy land, there are a number of ways to make an offer on it. You can use a real estate attorney and conduct the process yourself or use commercial realtors (brokers) to undertake due diligence on your behalf. Realtors will act as middlemen and negotiate with landowners to ensure you secure a good deal. You can simply ask neighbouring commercial building owners to recommend competent realtors.
Commercial construction requires experience and knowledge because as much as it can be a very exciting experience, it can also be filled with problems. The knowledge of the entire construction project process helps to keep it organized, efficient and successful. This is why as a construction project manager, you should be familiar with and surround yourself with parties conversant with related laws and codes and zoning regulations. You need to be prepared for every possible event and prepare a well-thought-out plan for any issues before they occur. You also have to be creative and flexible and learn how to successfully handle emergencies.