“Set your projects up for success before they start”
On today’s Coachcast we discuss setting projects up for success with proper project buyout.
Project buyout is about organizing and purchasing all materials, subcontractors, rental equipment and other things that we need to purchase to complete the project.
This process is often overlooked and is an after thought. We get caught up in our lack of time and end up completing this portion of the project on the fly and at the last-minute. Doing this results in fewer profits and a lack of coordination on the project.
If you want to take you business to the next level you need to start focusing on this part of the project process. Not addressing this up front is costing us thousands of dollars every year. Who doesn’t want to have a little extra bonus at the end of the year? If you make the time to plan your projects properly and complete a thorough buyout you will have more time to manage your business and you will improve your bottom line.
To get started in this process you need to develop a good buyout checklist. Take a look at your projects so you can determine the things you need on a regular basis and include them in the checklist. This will give you a guideline to make sure you get everything planned out correctly and also give you a template that you can use to delegate some of this work.
[tweetthis]Set your projects up for success before they start[/tweetthis]
The first thing on your checklist should be your budget. Take your estimating budget and use that to develop a planned buyout budget. Now that you have been awarded the project you can invest some additional time in understanding the project better and getting a real plan on the projected costs. Use this planned budget to work through your buyout process so you can try to cover all additional costs within your planned budget.
Now you can use your planned budget to help develop your detailed scopes of work and finalize all your purchases. The scopes should be added to your purchase orders and subcontracts agreements so that it is clear what is expected from your suppliers and subcontractors.
Having done this properly you should have been able to trim you costs and add some money to your budget contingencies before you even started your project. Now you can create your construction budget based on your actual buyout results.
[important]#ConstTip: During buyout is a great time cover scope gaps and improve your margins by having your suppliers/subcontractors cover some additional scope[/important]
Now that you have an accurate construction budget with some added contingency you can start building. By taking the time to develop this detailed plan and buying some additional contingency you are on the right track for a successful project.
Develop a standard project buyout checklist
Create a project buyout budget before you start
Purchase all external items with POs and contracts
Develop a construction budget after buyout