13 budgeting mistakes to avoid

From rookie mistakes to scheduling mistakes, we’ve rounded up the 13 budgeting mistakes to avoid on your self-build project if you’re managing the build yourself.

In this article we cover:

  • The role of the project manager
  • Top 5 rookie mistakes that will cost you time or money
  • Top 3 budgeting mistakes that will set you back
  • Top 5 mistakes when dealing with the schedule

Whether you’re partially managing some aspects of the build or taking on a project on a direct labour basis, there are pitfalls to avoid if you want your build schedule to stay on track. Here are the most common mistakes I come across on site.

budgeting mistakes to avoid

The role of the project manager

If you are project managing the entire build, it means you are in charge of hiring tradesmen yourself and coordinating every other aspect of the build.

Expect to be spending a lot of time chasing subcontractors / tradesmen; even once the project has started, you may find yourself chasing them to show up. Check and record the insurances held by each subcontractor.

You’ll also need to ensure there is a dry, secure space for storage and break times as well as perform all the Health & Safety duties. And you have overall responsibility for complying with the building regulations.

You’ll be sourcing materials, hiring equipment, investing in basic DIY tools, and be in charge of site security.

Dealing with waste, tidying the site and preparing for the next trade will be time consuming tasks.

You are responsible for arranging for deliveries and checking same, and for lead times – items arriving too early and you will have to store them without them getting damaged or stolen, too late and the build could be held up waiting for delivery.

Above all, any mistakes will be your responsibility to fix. You will also be in charge of the snag list, which could entail having to call back tradesmen to site – not an easy task if they have been paid for the work already.

Top 5 rookie mistakes

  1. Making changes after the work begins. This is important not just because it will usually throw the programme into disarray, but because it is one of the most common causes of time and cost overruns on any building job.
  2. Not paying attention to preliminaries. The site investigation into soil conditions should have been taken care of at the design phase, but if not, do it before the tender phase. Making unproven assumptions on foundation design can be one of the other big ‘unknowns’ that jeopardises your financial planning. Also talk to your new neighbours to reassure them that you won’t be working with noisy equipment at unsociable hours, or blocking their driveway, or any other concerns that they might have.
  3. You assume that you and your design team have all the answers sorted and that the contractors and tradespeople will arrive on site and execute the works exactly as planned. In reality, you will have all the answers only after you and your design team sit down with the construction teams before works commence and tease out any foreseeable difficulties with the construction phase documents, including the programme.
  4. Failing to establish clear lines of communication. We all have our own preferences of which type of comms technology works best for us but I would suggest that you identify an app that allows you to at least set up groups and subgroups and ensure that everyone knows that on this project, it is the only method that will be used for one-off messages. In addition, everyone that needs access to drawings and documents should belong to the online project folder (free cloud solutions are available) and must be notified of any documentation changes each and every time they occur.
  5. Believing suppliers when they claim that certain products cannot be obtained and agree to them substituting the product you want with another. Never take ‘no’ for an answer until you check it yourself. Unless we get any other big unforeseeable events beyond normal human control, then supply chain requirements should have been properly addressed before work commenced. Do take time to vet your suppliers thoroughly before setting up an account.
budgeting mistakes to avoid

Top 3 budgeting mistakes to avoid

Not getting prices sorted out in good time.
Ordering supplies is not a simple matter of getting a price and then placing an order. You need to get two or three prices for everything, checking to see if they actually match the design specification, compare them like for like, check availability and lead times; plug all this information into your programme and then finally order them. Failing that, at the pre-construction stage, estimate costs until you get firm quotations. Know the legal difference between estimates and quotations and check if any prices have time limitations. A well managed tender process should take care of all this.

Ignoring the difference between a cheap quote and a value for money quote.
Look for people with good reputations that you can check up on and verify yourself. A cheap quote from someone who puts an inexperienced or slack team on the job can easily turn out to be more costly in the long run. If a quote comes in significantly cheaper than the others, find out why if you can. It may signify that the supplier is keen to get the work, or has overlooked something. A quote that is significantly higher than the others may mean that the supplier doesn’t really need the work but if they get it, the high price is a bonus. On the other hand, it may indicate that this supplier has accounted for something that the others have missed, or that they are committed to achieving the highest quality. Some sub-contractors may be totally self-sufficient, whereas others may expect you to hire plant and equipment for them. Find these things out at the tender phase.

Failing to meet cash flow expectations.
Make sure that the pricing of the activity schedule is well balanced and make sure normal cash flow expectations of the various contractors can be met. In other words, the programme should inform you as to when payments are due and how much you need to draw down at each stage. Again, pre-construction meetings and scheduled site meetings should sort these issues out before they can become problems

budgeting mistakes to avoid

Top 5 mistakes when dealing with the schedule

  1. Failing to ensure that everyone, including yourself, is on the same page for every single aspect of the job. Make your requirements on quality of workmanship and materials clear to all right from the start and ensure that everyone collaborates with you and with each other. Be curious. Just because you think you know what a particular term in a drawing or specification means, doesn’t necessarily mean that others have the same understanding. As they do in any technical work, abbreviations and jargon appear regularly, so take time to understand them when you are writing up the programme.
  2. Missing opportunities to tie up work teams with each
    other and with the supply chain.
    A clearly presented programme will solve these issues, but only if you spot them in time. Check regularly with your teams so that they get everything they need, including plant, equipment and materials, on time. Check what preparatory work they will need to get started and any other help they need from others as they go along.
  3. Presuming the average site operative will take time to read the drawings. Even with the most faultlessly produced drawings and specifications, this is a big mistake. General labourers should be properly briefed by the contractors or their team leaders, but above that skill level, everyone should regularly refer to the drawings and specifications before they commence work and at any time whilst they are on site. Keeping a set of up to date laminated working drawings fixed in a prominent position in the site hut is the easiest way to achieve this.
  4. Failing to be accurate and realistic about project deadlines. It is much better to under promise and over-deliver than the other way round. You, as the employer, should have the power under the contract terms to instruct sub-contractors if and when works need to be stopped or postponed. Holding off wet trades in frosty weather would be one example of when you might need to do this.
  5. Neglecting to ensure that tradespeople are up to date with the knowledge and skills required for your particular job. If it takes a week to sit down with joiners, plasterers, window fitters and bricklayers to make sure that they know what is expected of them, then that is time well spent. Trying to do this on site during working time is often a nightmare and your programme will suffer. Allow time on the programme for briefing your team leaders before they start work. Training may be required for non-standard methods of construction. If you are using less mainstream methods or materials, such as lime plaster or hempcrete for example, it pays to get someone with appropriate experience on the team.

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Leslie O'Donnell

Written by Leslie O'Donnell

Les O’Donnell is a Chartered Architectural Technologist and structural engineer with over 30 years’ experience designing and supervising the construction of new builds. His practice, Landmark Designs, is based in Co Tyrone. All of the information contained in the guide is for information purposes only; professional guidance must be sought for your own specific project.

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