Reducing project building costs and risk with early builder involvement

Early builder InvolvementTo reduce the risk of complications on your project, be sure select a head contractor or builder early in the planning process. That will give you the opportunity to introduce them to the site, discuss your needs, get some constructive criticism on the scope and nature of the project, take advantage of advice on costs and get a heads-up on some potential issues that you may not have thought about.

My clients often ask me to come out and see a site before they start their feasibility study. Sometimes they have formal requirements, but often they simply want to get an experienced builder’s feedback on their ideas. The clients who do this tend to have the most successful developments, over and over again. They continuously produce projects that are easily tenanted and occupied and that make more money.

Getting a contractor involved at the early stages can give the developer an idea of “real” building costs. Budgets can be set using the builder’s identification of risks and from there, a strong and comprehensive feasibility study can be produced. The initial numbers can then be used for negotiation in land purchasing or commercial lease terms. The cost estimate is refined later on, but a fairly accurate initial estimate, the kind you can only get from someone with years of experience in the business, is exactly what a developer needs to make the kind of well informed initial choices that lay a strong foundation for the project and turn into good business decisions.

When, exactly, should you call in the builder or head contractor and how do you define “early in the planning process?” An early stage of the planning and development process might be when you have a rough idea of the terms and the site location and restrictions, but you don’t have enough information to produce the numbers you need to judge the project’s feasibility. There doesn’t need to be any hard documentation or even a preliminary design on the table. That will follow from the scope, budget and rough estimate. An idea and a general design concept are all that is required.

If a builder is brought fully on-board early in the process, then you can still put the project out to tender. However, when it goes out for tender, you will be armed with more and better information and you will be able to make more informed decisions. Identifying risks early in the process is the key to getting the desired outcomes.

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