Navigating rising costs as an ID or renovation company

Running a successful renovation project within budget can be tough. This has become even more challenging with ever increasing material and labour prices, making a cost estimate done now inaccurate a month later when you actually purchase the materials.

According to Linesight (a construction consultancy firm), material prices will stay high in 2022 and only stabilise to pre-Covid levels in early 2023. Renovation projects costs will thus naturally remain high for the foreseeable future.

In light of this, it becomes ever more important for ID and renovation companies to reduce waste and create more value at every stage of their projects. Here are some principles to help us increase efficiency, reduce cost and produce higher quality services and profit as a result.

Focus on Value

What a client pays for something, and the value that they receive (or perceive to receive) are two separate things. With the current price uncertainties, it becomes even more important to increase the value that you bring to the table.

To create value, you need to know your stakeholder. An internal stakeholder is someone who has a stake in the project’s success (your own team, subcontractors etc.). An external stakeholder is the customer who engages you for your services.

Once you have identified your stakeholders, you can better determine how you can provide value to them. For example, value for an internal stakeholder like a subcontractor could mean good scheduling so that he can maximise his time. For a customer, this might mean moving in on time or having quality finishings.

Identify and Reduce Waste

The next thing you need to do is to identify waste across each project management stage to maximise efficiency. Some types of waste that are common in the renovation industry include:

Defects. This includes things such as quality issues, wrong material choices, incorrect sizing etc. This could be a result of forgetting a detail or miscommunication, and leads to costly rectifications and a loss of materials. In order to overcome this, you need to have a proper system in place to help you organise and track your projects. For example,  lets say that you have an issue with defects that result from not properly discussing with your client their preferences. Establishing a good process during the design phase of the project where you communicate these things with them is vital. Perhaps you could consider having a standard checklist ready for the client to fill in before you start work.

Waiting. This includes the cost resulting from delayed timelines in final product deliverables. Waiting also results in less time to complete the job if there is a hard deadline, possibly leading to quality being compromised on. Scheduling your projects and communicating any changes to the schedule to all stakeholders in a timely manner is extremely important to the success of your project.

Set Client Expectations

You can do everything right by planning ahead, communicating well with your team and budgeting properly. However, at the end of the day, the client will not see most of this. What matters most is that the end result meets the expectations that they have. Therefore, you need to properly manage your client’s expectations.

To do this well, you need to be sincere. The common misconception is that the renovation industry is shady, so it is important that you build trust in your relationship with your clients. It is very important to build buffers into your projects so that you are able to deliver on your promises (cost, schedule) despite fluctuating costs.

You also need to communicate well and in a timely manner. No one likes to be told of a sudden cost increase or delay at the last minute. Anticipate such issues in advance and if possible, allow the client to decide between a few options. For example, check material inventory early, and if there is going to be a possible shipping delay, give the owner a chance to wait, which might delay the project, or to change to another option.

Hopefully, these principles can help you to better manage your renovation projects and create more successful outcomes for you and your clients. If you want to organise your projects and make less mistakes, Offset can help you. Offset is a software tool for Singapore renovation companies to create quotations in minutes, manage your projects, track expenses and much more.