Whether it’s a tenant improvement project or a ground-up build, there is a long list of factors that can determine a project’s success or failure. When companies lease or purchase new space, more times than not the space needs to be built out or adapted to fit the organization’s operating needs. While the square footage and scope of work will vary from project to project, the investment of time and money for construction is always significant. And when a project is not properly managed, additional costs can add up. To help avoid costly mistakes, we have identified four of the most common reasons commercial construction projects fail.
1. Poor planning
Planning is a crucial cornerstone to any successful construction project. Without a proper plan in place, a project can be doomed before it even begins. A solid construction project plan serves as the blueprint for the project’s entire lifecycle. A plan that’s laid out well sets the foundation for project managers to efficiently allocate resources, control costs and efficiently manage and predict timelines. A good plan outlines main objectives, identifies possible challenges and carefully details each step of project execution. A project plan should also ensure that all stakeholders are aligned and informed along the way. A thorough plan not only defines proper steps and timelines but also outlines roles that different parties play. Carefully identifying different roles, responsibilities and communication protocols fosters better collaboration among teams, contractors and suppliers. Effective planning is the difference between chaos and order, which ultimately increases the likelihood of successfully completing construction on time and within budget.
2. Overlooking requirements
Failing to establish a clear understanding of construction project requirements can be detrimental. Identifying a clear list of requirements for each phase of a construction project from site selection through occupancy is a long one. Projects can require different applications for permits, certifications, zoning and inspections. Having a clear understanding of which requirements apply to a specific project is crucial to its success. When selecting a commercial construction project site, it’s important to consider factors like zoning laws, environmental impacts, accessibility and local regulations to ensure a project is feasible and sustainable. Project managers also need to have the ability to accurately comprehend the design and functionality requirements of the project. This helps ensure that the final construction aligns with the client’s needs and vision. Fully understanding these requirements assists in making the best decisions regarding materials, labor, budget and scheduling.
3. Underestimating budget
One of the biggest reasons commercial construction projects fail is due to a miscalculation or underestimation of the budget. Construction projects require funding, and it begins with setting a realistic budget. The budget needs to include all necessary costs and it should account for potential changes or issues that may arise. No one likes a surprise, but it is better to cushion the budget for changes than be caught without the funds for something unexpected. Much like a sound construction project plan, a well-crafted budget lays out the financial roadmap for a project and covers a project from procurement to labor costs and unexpected contingencies. A complete budget allocates resources efficiently and lays out a detailed plan for managing cash flow. Budgeting also makes it easier for decision-makers to make informed choices, assessing quality, needs and costs while minimizing financial risks. A well-thought-out and followed budget helps prevent cost overruns and delays, which are detrimental to construction projects.
4. Lacking leadership
A commercial construction project is more likely to fail when the wrong people are making decisions. Having too many decision-makers (think too many cooks in the kitchen) can cause unwanted confusion. By the same token, failing to identify a clear leader to make final decisions or selecting an individual or individuals that does not understand the goals and objectives of the project will create issues. It’s important that the decision-makers have the experience and knowledge necessary to ask the right questions and provide valuable guidance for taking the project from concept to completion.
This is where hiring a proven commercial construction project manager can make a significant difference. Skilled commercial construction project managers will anticipate challenges, mitigate risks and help the team make informed choices that align with project objectives. Effective decision-makers should foster collaboration among stakeholders to ensure that the project stays on track and any conflicts are resolved quickly and efficiently. The competence and leadership of the main decision-makers on a project can be the difference between a smooth, successful project completion and one marred by costly mistakes, delays and dissatisfaction.
The LaunchPM team has extensive experience in the commercial construction industry and knows what it takes to successfully take projects from site selection through occupancy. Our services include everything from planning and execution to closeout. If you are considering moving offices, expanding operations or need a new facility, contact LaunchPM to learn about our services and how we can help you through the construction process.