The aim of every client is to save as much more money as possible in a project. For this reason, clients have a proposed amount for a given project and sometimes when estimated cost exceeds this amount, the client can decide not to proceed with the project or hire another service provider for his project who can give good service at lower cost. It is possible to save as much money in construction as possible. This is not a call to cut corners but doing quality work with significant savings. Though a tight budget does not give you freedom to make much profit, you should bear in mind that construction works is not actually how much you make but being able to build your portfolio because it is the number of projects you have delivered that would convince your next client to hire you.
By following judiciously, the following practices at the different stages of a project, one can be able to make significant savings.
Ways to reduce cost during the design stage of the project
1. Reducing the size of the building – this is usually a very popular method but it often removes the project from the initial intention of the Client and in essence reduces the services that the project can provide. This should be adopted in a situation where other methods do not go through and effort should be made not to compromise quality and safety in the process.
2. Change the shape of the building – changing the shape of the building also helps to minimize cost. It is on record that square-shaped buildings are usually less expensive than rectangular-shaped buildings.
3. Reduce corners and complexities in the buildings – excess corners and complexities in a building increase cost. If the budget is tight, effort should be made to remove much corners and complexities without excessively impacting the aesthetics of the project.
4. Adjust the thicknesses of slab – if the slab in the building is too thick, it would consume much concrete and increase cost. Designs should be conservative and in line with limit state principles ensure that there is not over assumptions and overdesign.
5. You can use cheap light weight substances as substitute for internal walls – most internal walls usually serve as partition walls and do not bear much loads. Therefore, cheap light weight substances can be used for it instead of heavy costly sandcrete or concrete walls.
6. Consider reducing circulation spaces especially in commercial buildings – when there is large circulation in buildings, it increases the length of walls in the buildings as well as the area coverage of slab. Reducing the circulation space to minimum acceptable size should also be adopted to reduce cost.
Ways to reduce cost during the procurement stage of the project. This is very important because approximately 60 – 70% of the project cost is due to materials cost.
1. Time of planning– if budget is tight, seek for more time of planning from the client in order to effectively plan well.
2. Proper planning (schedule for plants hire, material purchase etc) – prepare a good schedule that does not inflate cost of hiring equipment and buying materials.
3. Early purchase, timing and sense – this is very necessary because of the tendency of prices of materials to increase rather than decrease. So, buying all required materials early enough would reduce the effect of additional cost that may come within the time of execution of the project.
4. Plan site in such a way that there is a space for dumping on different points – there should be effective site planning to reduce theft and wastage.
5. Give samples for approval before bulk purchase – always ensure that the material you want to buy is approved to avoid buying, rejection and re-buying.
6. Purchase from factory or source and not third party or middlemen – buying from factory or source ensures that original materials are bought even at cheaper rates. This is very important.
7. Buy in bulk – this is also important because buying materials in bulk usually attracts discount and reduction in cost.
Ways to reduce labour cost of a project
1. Establish good relationship with labourers/tradesmen – establishing good relationship with labourers/tradesmen ensure that they can accept to do some jobs for you at the reduced rate.
2. Use one sub-contractor rather than individual labourers – using one sub-contractor for different tasks of a project also builds to reduce cost than when hiring individual labourers because when a task is priced in bulk, some price cuts are obtained.
3. Use quotes from 2 to 3 workmen.
4. Negotiate hard – don’t relinquish easily during negotiation but ensure you have reached the tipping point of price before you can accept the given rate.
5. Use only skilled men your work – this is necessary to avoid losses associated with the rework of badly done work.
Ways to reduce cost in the method of construction
1. Store materials and set up mixer close to place of casting to avoid wet and dry waste – transporting materials over long distances often leads to enormous losses.
2. Reduction of theft by creating site allies and ways of reporting deliveries of materials – build friends within your site. That is those you can trust to watch over your site and protect your site from theft by other labourers and also help to report exact material deliveries to you.
3. Use more precast elements where possible to reduce the cost of creating formwork – using precast elements helps to reduce cost associated with erecting formwork on site and also reduces wastage of concrete. These should be used where possible.
4. Use any other alternative healthy option – any other viable method that present itself to your intuition can be adopted.
5. Purchase from close by to reduce transport cost – purchasing from close by vendors helps to reduce transport cost and overall project cost especially when bulk purchase is not involved otherwise buy from factory.
Ways to reduce project costs in a long term
1. Acquire plants and assets e,g concrete mixers, dump trucks, asphalt plants – this would help to reduce costs involved in hiring these equipment.
2. Quarry registration – necessary to get aggregates at cheaper rate or supplier contractors at cheaper rate.
3. Acquire borrow pits – acquiring borrow pits would also help to reduce costs involved in buying fill materials.
4. Always keep working capital – ensure you keep your working capital intact without excessively spending it in irrelevant materials to ensure you have a stable company.
Direct method of determining labour cost per unit of measurement for the key items of construction work that consume cost. This is similar to the thoughts on my previous post: common construction items in Nigeria and their……. However, this method is very direct and necessary to help one know whether to proceed with proposed bill or not.
A. Labour prices for concrete per cubic metre (this depends on the mix ratio of the project and also on the locations of the project)
Labour cost/m3 of preparing 1:3:6 concrete mix ratio = cost of 5 bags of cement + [0.45 x (cost of 30 ton of sand/20)] + [0.9 x (cost of 30 ton of aggregate/20)] + N 5000 (labour cost for casting 5 bags of cement).
Labour cost/m3 of preparing 1:2:4 concrete mix ratio = cost of 6 bags of cement + [0.43 x (cost of 30 ton of sand/20)] + [0.86 x (cost of 30 ton of aggregate/20)] + N6000 (labour cost for casting 5 bags of cement).
B. Labour prices for reinforcement per ton (this also depends on the location of the project).
Labour cost/ton of preparing reinforcement bar = Market price per ton of reinforcement + [N40000 or more as labour cost depending on region] + [10% of the market price per ton (to cover costs of wastes, transportation, loading, offloading and tying wire)].
C. Labour prices for formwork per square metre
Labour cost/m2 of preparing formwork = Market price of the wood per square metre + [(N300 – N500) as labour cost per square metre] + [15% of market prices per square metre (to cover costs of wastes, transportation, loading, offloading, nails etc)].
Thanks!
