It’s a familiar story for many in the UK residential construction sector. A project starts with a clear budget and high hopes, but as the weeks and months go by, costs begin to spiral. Before you know it, the project is significantly over budget, eating into your profits and causing stress for both you and your client. If this sounds familiar, you’re not alone. A staggering 68% of small residential projects in the UK experience budget overruns, with an average cost increase of £23,000.
In a competitive market like London, where margins are already tight, these overruns can be crippling for small to medium-sized construction businesses. They can damage your reputation, strain client relationships, and ultimately threaten the financial viability of your company. But what are the root causes of these budget blowouts, and more importantly, what can be done to prevent them? The answer, in many cases, lies in improving communication and project management processes.
Several factors contribute to the widespread problem of budget overruns in UK residential construction. While some are external and difficult to control, many are internal and can be addressed with the right strategies and tools.
1. Inaccurate Initial Estimates: An unrealistic budget from the outset is a primary cause of overruns. This can be due to a lack of detailed information, overly optimistic timelines, or a failure to account for potential risks and contingencies.
2. Poor Communication and Coordination: As we've highlighted before, disjointed communication is a major issue in the construction industry. When project managers, subcontractors, and tradespeople are not on the same page, it leads to mistakes, rework, and delays – all of which add to the cost of a project.
3. Scope Creep: Changes to the project scope are inevitable, but if they are not properly managed, they can quickly derail the budget. Without a clear process for documenting, approving, and pricing changes, costs can escalate rapidly.
4. Unforeseen Site Conditions: Unexpected issues on-site, such as unforeseen ground conditions or problems with existing structures, can lead to significant additional costs. While it's impossible to predict every eventuality, a thorough site investigation and a contingency fund can help to mitigate the financial impact.
5. Labour and Material Costs: The UK construction industry is currently facing a perfect storm of rising material costs and a shortage of skilled labour. This makes it more challenging than ever to accurately forecast and control project costs.
For large construction corporations, a budget overrun on a single project might be a manageable issue. But for the small and medium-sized businesses that make up the backbone of the UK residential construction industry, the consequences can be far more severe. A £23,000 overrun on one project could wipe out the profit margin for several others, creating a precarious financial situation.
This is where the need for a robust, yet user-friendly, project management solution becomes critical. Many small builders and contractors are put off by the complexity and high cost of enterprise-level software like Procore or Fieldwire. They need a tool that is designed for their specific needs, one that is easy to use on-site and helps them to control costs without creating a new administrative burden.
BRCKS is the construction project management software that the UK residential construction industry has been waiting for. It’s a powerful, yet simple, platform that gives you complete visibility and control over your projects, from initial estimate to final handover. With BRCKS, you can say goodbye to the chaos of emails, WhatsApp messages, and spreadsheets, and hello to a single source of truth for all your project information.
Our platform is designed to tackle the root causes of budget overruns head-on. With BRCKS, you can:
Bonchurch BC, a London-based construction and maintenance company, has experienced the benefits of BRCKS firsthand. By using our platform to streamline their operations, they have been able to save an hour per day in both their management and maintenance divisions. This has not only improved their efficiency but has also given them greater control over their project costs.
Don't let budget overruns eat into your profits and damage your reputation. With BRCKS, you can take control of your projects, improve communication, and ensure that you deliver on time and on budget, every time.
BRCKS is currently in beta, and we're looking for forward-thinking construction companies to join us. Sign up today to be among the first to experience the future of construction project management.
Visit the BRCKS website to learn more and join the beta.
