5 Tips to Reduce Cost on Commercial Construction Projects

Navigating through the intricate process of commercial construction projects demands a strategic approach, meticulous planning‌ and a deep understanding of the industry’s dynamics. Given the substantial investment involved, it’s imperative to optimize every stage of the project to manage costs effectively and ensure a successful outcome. 

This blog will provide critical strategies and tips aimed at enhancing efficiency, controlling construction costs‌ and ensuring a more seamless execution. By adopting these practices, stakeholders can expect a reduction in unnecessary expenses and a well-coordinated process.

Plan early and in detail during preconstruction

Preconstruction is critical to project success

The journey of constructing a commercial building starts long before the actual construction begins. The preconstruction phase is a critical period where plans are laid out, budgets are set‌ and the groundwork for the entire project is established. 

By investing time and resources into this initial stage, stakeholders can gain a clearer understanding of the project’s scope. You can further identify potential challenges‌ and devise strategies to mitigate risks. 

Leveraging construction management software during preconstruction creates efficiencies and consistency for your project. It generates a continuous stream of data starting with the initial estimate all the way through to project closeout. 

Effective project management drives successful project outcomes 

Effective project management is the cornerstone of successful commercial construction projects. By adopting a top-level approach, project managers can oversee every aspect of the construction process, from design to procurement and construction. They play a crucial role in coordinating the efforts of various teams. It is their responsibility to ensure that the project stays on track, within budget and adheres to the highest quality standards. 

Successful project management results in a smoother construction process. It ensures more efficient resource utilization‌ and ultimately leads to lower cost on commercial construction projects.

Estimate cost-per-square-foot to effectively manage commercial construction cost

Understanding and accurately estimating the cost per square foot is vital for budgeting and financial planning in construction. This metric provides a standardized way to compare and assess the cost efficiency of different projects. 

By gaining insights into the average construction cost per square foot, stakeholders can make more informed decisions. Next to better resource allocation, it also allows them to identify areas of cost savings.

Prioritize collaboration across project stakeholders 

Choose the project delivery method that’s right for you

Introduced in recent years, the design-build approach represents a paradigm shift in commercial construction. It fosters collaboration and integration between designers and builders from the project’s start. This method contrasts with the traditional design-bid-build process by streamlining project delivery and leading to cost and time savings. 

When taking a design-build approach, a single entity holds responsibility for both design and construction. This makes it more likely that potential risks and issues can be caught during the design phase. With greater general contractor involvement in design, there should be less surprises and change orders throughout the project. This project delivery method can significantly enhance the efficiency of the commercial construction process.

Consider the Construction Management at Risk delivery method when looking for financial predictability on your project. This approach enables collaboration between your contractor and design teams during preconstruction. Both teams are involved in developing accurate budget expectations, that inform a guaranteed maximum price (GMP) for the project. 

It’s key for the CM to work effectively with design teams and contractors on the project. Not only to make sure the project runs smoothly, but to minimize their financial risk while meeting the owner’s expectations.

Establish integrated teams on commercial construction projects

Embracing an integrated project team model fosters a collaborative atmosphere, where contractors, architects, engineers and other stakeholders work cohesively towards common goals. This in turn facilitates better communication, quicker decision-making‌ and a more agile response to challenges. Consequently, it contributes to the overall success and cost-efficiency of commercial building projects. 

Through this approach, the commercial construction process becomes more streamlined, transparent‌ and aligned with the project’s objectives and budgetary constraints.

Prioritizing early, completing detailed planning and adopting a project-delivery approach that meets your needs, sets the stage for a successful, cost-effective project outcome.

Ensure comprehensive site preparation to minimize commercial construction cost

Why proper site preparation is important

Site preparation sets the foundation for a safe and efficient construction process. It involves clearing the land, setting up proper drainage‌ and ensuring the soil is suitable for building. If this step isn’t executed properly, it could lead to construction delays and increased costs downstream. 

For instance, discovering unstable soil after construction has begun can result in expensive modifications to the project plan. This in turn significantly impacts project profitability. Thus, investing time and resources in thorough site preparation is essential for the overall success and cost management of your project.

Build and manage effective construction teams

The impact of a cohesive construction team

The construction team, comprised of skilled laborers, technicians‌ and supervisors, is the driving force behind successful projects. Their expertise and dedication play a crucial role in executing the project plan, adhering to quality standards‌ and maintaining the construction timeline. Effective management of these teams is essential to ensure they work cohesively, stay motivated‌ and deliver their best work.

Empowering effective team collaboration

Fostering a collaborative environment is key to managing construction teams effectively. This includes clear communication, regular meetings‌ and the use of project management software to keep everyone on the same page. 

Additionally, providing training opportunities and recognizing good performance can enhance team morale and productivity. Adopt these best practices, to ensure your construction teams are well-coordinated, highly efficient and motivated to do their best work.

Pay close attention to detail during final phases

Capture outstanding issues in a punch list

The punch process is critical to the success of commercial construction projects and takes place throughout construction and during the final punch walk. Create punch lists to capture any outstanding tasks or issues that need to be addressed before the project can be considered complete.  Jobsite management software, like Fieldlens by RedTeam, allows general contractors and architects to jointly capture and review any punch items. All parties involved can communicate in real time and resolve punch items once addressed using the collaborative platform.

Paying close attention to and closing all items in the punch list ensures that every aspect of the project meets the required standards. This helps avoid costly corrections or modifications after substantial completion. By diligently managing the punch list, stakeholders can ensure a smooth transition from construction to occupancy. Ultimately, this helps safeguard the integrity and success of the project.

Ensure permits and regulations are met

Obtaining the necessary building permits and ensuring compliance with all relevant regulations is a crucial part of the commercial construction process. 

Failure to do so can result in fines, delays‌ and legal issues, significantly impacting the profitability and success of the project. Stakeholders must prioritize this aspect of the project. Close collaboration with local authorities and experts ensures all permits are obtained, inspections are held and regulations are met. Using construction management software like RedTeam Flex assists in the recording of permits, manuals and OSHA documents. Ultimately, a proactive approach and continuous review helps safeguard the project from potential setbacks.

The bottom line

Commercial construction projects are complex with a multi-faceted process that demands careful planning, efficient management‌ and attention to detail. 

Adopting the right project-delivery method for your needs helps to align every phase of the project with the overall objectives and budget. When you supplement this with building an effective construction team and investing in construction management software, you hold the key to maintaining a healthy bottom line. 

Explore RedTeam’s solutions to accellerate your success today.

Frequently Asked Questions

Q: Why is early planning crucial for reducing costs in commercial construction projects?

Early planning during the preconstruction phase helps stakeholders understand the project’s scope, identify potential challenges‌ and devise strategies to mitigate risks. This proactive approach can prevent costly delays and changes, ultimately saving money.

Q: How does effective project management contribute to cost reduction in commercial construction?

Effective project management ensures that every aspect of the construction process is well-coordinated, from design to procurement and execution. By overseeing these elements, project managers can maintain budgets, improve resource utilization‌ and ensure high-quality standards, which collectively reduce overall costs.

Q: What is the importance of estimating cost-per-square-foot in commercial construction?

Estimating the cost per square foot provides a standardized metric for budgeting and financial planning. It allows stakeholders to compare different projects, identify cost-saving opportunities‌ and allocate resources more efficiently, leading to better financial control.

Q: How can the design-build approach help in reducing construction costs?

The design-build approach fosters collaboration between designers and builders from the project’s inception, streamlining project delivery. This integration helps catch potential risks early, reducing the likelihood of costly surprises and change orders, thereby saving time and money.

Q: What role does site preparation play in minimizing construction costs?

Proper site preparation ensures a stable foundation for construction, preventing issues like unstable soil that can cause costly modifications later. Investing in thorough site preparation can avoid delays and additional expenses, contributing to overall cost efficiency.

Q: How can leveraging construction management software aid in cost reduction?

Construction management software streamlines data flow from estimation to project closeout, enhancing efficiency and consistency. It facilitates better communication, real-time updates‌ and effective collaboration among stakeholders, which can significantly reduce unnecessary expenses.

Q: Why is prioritizing collaboration among project stakeholders important for cost control?

Collaboration among stakeholders, including contractors, architects‌ and engineers, ensures cohesive teamwork and better communication. This integrated approach leads to quicker decision-making, agile responses to challenges‌ and ultimately a more cost-effective construction process.

Q: What is the significance of managing punch lists in commercial construction projects?

Managing punch lists diligently ensures that all outstanding tasks and issues are addressed before project completion. This attention to detail prevents costly corrections or modifications after substantial completion, ensuring a smooth transition from construction to occupancy.

Q: How does the Construction Management at Risk (CMAR) delivery method enhance financial predictability?

The CMAR method involves collaboration between contractor and design teams during preconstruction to develop accurate budget expectations. This approach sets a guaranteed maximum price (GMP), reducing financial risks and ensuring the project stays within budget.

Q: What are some best practices for building and managing effective construction teams?

Effective construction teams are built on clear communication, regular meetings‌ and the use of project management software. Providing training opportunities and recognizing good performance can boost team morale and productivity, leading to better project outcomes and cost savings.