There’s a famous quote that says, “there’s no reward in life without risk.” And it’s true – you do often have to leave your comfort zone to reap the most profitable business opportunities. Risks and failures are also how you learn and grow; how you get even better at what you do.
However, in construction, risks are usually best when kept to a minimum… and that can be a tough goal to achieve.
A construction company can encounter any number of challenges and without thinking ahead, you may not be able to properly manage them.
Which construction risks can you identify before they happen so that you can calculate and manage them effectively?
One of the most frustrating construction risks is dealing with – and managing – your budget. When things come up that impact what you intended to spend, it can really hurt your bottom line. You cannot completely remove market risks such as unexpected increases in material costs and availability of building materials from your calculation, but you can review year-over-year averages to make a calculation based on historical data.
The current workforce shortage in the construction industry is well documented and often written about. You could take stock in the fact that a majority of the industry is experiencing difficulty placing workers for their projects, or you could become a part of the industry segment that is using technology to mitigate the labor shortage risk. Stop padding your margins to account for hiring expensive last minute subcontractors and start using a tool that will help you plan smarter.
Whether this is with your client, your vendors, or your subcontractors, any change or miscommunication about the contract can be a detriment. Keep these construction risks in the back of your mind:
- Managing change orders
- Poorly written contracts
- Incomplete drawings and poorly defined scope
- Issues with subcontractors and suppliers
Perhaps two of the most important risks to consider are safety and poor project management. Safety hazards, as a result of environmental factors, lack of training, or just pure accidents, can lead to worker injuries, which hurts you in more ways than one. In addition, having a poor project manager can impact production, on-time completion of the project, and ultimately customer retention.
Identifying Construction Risks
We know – with that long list of potential risks and challenges for each project, it’s going to be hard to identify what might happen. But if it were easy everyone would do it.
Meet with key members of your project team before each job and discuss “what if” scenarios. Discuss budgetary concerns or contractual challenges, and talk about how you’ll manage it if it does come up. If you’re not already, use Thunderbolt Pipeline to identify gaps you may be missing in these conversations
But how can Thunderbolt Pipeline help manage Construction Risks?
The Thunderbolt platform taps into many important aspects of a project and provides data in easy-to-access dashboard reports that you can use to minimize risk across all of your jobs.
- Bid management: Thunderbolt leverages machine learning and predictive analytics to help your organization easily predict future wins. This helps to reduce risk by guiding you to the projects you’ll be most likely to win – eliminating wasted time or bidding too low and undervaluing your services.
- Thunderbolt Compliance: Easily manage documentation and trainings using Thunderbolt Compliance. Receive alerts as due dates draw near so you can avoid unnecessary fines.
- Thunderbolt Resources: With this feature, you can identify unnamed resources so you don’t over to under commit to a project – and so your workers aren’t sitting idle while you’re paying them to do a job. You can also plan for materials you’ll need ahead of time.
Like we said – there is often little reward with no risk – but that doesn’t mean you should overlook them. By staying informed and planning ahead, you’ll be ready when risks and challenges do come up.