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June 10, 2024 in Administration Financials Project Management

Expert insights for controlling costs

A keen eye for detail is required for construction and renovation projects of all shapes and sizes – and not just when it comes to finishes. Budgets and financial allowances are an important piece of the puzzle for both contractors and their clients, and must be properly managed to keep the project on track.

Photo by Geoff Fitzgerald, courtesy of Home Hardware.

David Kenney and Joey Fletcher, builders and owners of BroLaws Construction, have been renovating houses since 2016. Now, as the company focus turns to building custom homes, the brothers-in-law and HGTV personalities share a behind-the-scenes look at what goes into budgeting and managing project costs.

How do you typically determine a budget for a project? What costs and factors are considered?
Managing your crew labour and timelines is essential for determining and maintaining a project’s budget. To stay on track, every Sunday night our crew receives a list of goals for the week that we are counting on them to complete. It ensures everyone is on the same page and balances our projects when we have multiple on the go. If one project is ahead, then we may move someone to another job.

What strategies do you use to control costs during a project?
We build allowances into all our projects and each trade has a budget and an allowance to work within. Sometimes they go over and sometimes they go under. That cost is directly transferred to our client. It helps us not to overcharge for those “just-in-case” moments.

Materials can also be a driver to reduce costs by buying products in bulk, earning credit card points, and leveraging rewards to decrease the hard costs to the business. For example, we frequently shop at our local Home Hardware Building Centre, earning Scene+ points on the Scotia Home Hardware PRO Visa Business Card that we can redeem for day-to-day supplies, helping us save money.

How do you handle unexpected expenses or changes in project scope?
This is very common in any renovation or build and communication is key. You never know what you are going to find when you open a wall, so we advise that you have 10 to 15 per cent of your project cost set aside for anything unexpected. During the project, we run an addition/subtraction sheet that is shared with the homeowner to keep track of cost and remain on the same page.

What do you look for in suppliers and vendors to help you manage costs effectively?
Supplier communication is everything. Being able to quickly get accurate estimates on material costs helps firm up our project estimates to avoid incurring extra costs. Our Home Hardware Building Centre recommends new products that help us manage our client’s costs, as well as supplies that might outperform what we had previously been using. Having solid product knowledge goes a long way with your client.

Why is access to credit so essential for contractors/business owners?
Credit cards are essential to keeping our business running smoothly. We look for a credit product that allows our employees to be supplementary cardholders, so they can get materials when they need it. Credit also keeps us ahead, so we don’t have to hound our clients for payments to keep up with the cost of an active project. We signed up for the Scotia Home Hardware PRO Visa Business Card as it was designed for small businesses, specifically those in home improvement. The credit program offers limits up to $500,000, which is a gamechanger when you’re working on a custom home build.

Photo by Geoff Fitzgerald, courtesy of Home Hardware.

Our advice to fellow contractors is to stay on top of your credit. Using credit is a smart way to invest back into your business and can help track and manage expenses. Don’t spend what you don’t have, and use credit and loyalty programs, like the Scotia Home Hardware PRO Visa Business Card, as a tool to earn Scene+ points on the materials you’re purchasing at Home Hardware.

When considering a financial partnership, what factors are important to you and your business?
Rewards matter most. A close second would be flexibility on payments. Our business is busy. We are onsite every day, so it’s not the easiest to remember to make those payments. With the Scotia Home Hardware PRO Visa Business Card, there is a 21-day grace period, competitive interest rates, and no annual fee.

Learn more about the Scotia Home Hardware PRO Visa Business Card at Scotiabank.com/PROVisa

Created in partnership with AmplifybyAnnex.com.


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