A successful construction project is one in which everybody wins. The project is on time, is within budget, meets (or surpasses) the owner’s expectations, and provides construction companies with the profit they were expecting.

So why are only 25% of today’s construction projects considered successful? According to one survey, 75% of owners said their construction projects extend beyond planned budgets, whereas 77% say their projects run late (70 days late, on average).¹

Although many factors can contribute to the success or failure of a construction project, five common missteps almost always lead to construction project problems. Learn more about these mistakes and how to work around them.

Lack of proper up-front planning

When construction work gets underway without a thorough understanding of plans, scope of work, important milestones, or client expectations, then poor execution likely will be the result. With so many parties involved (architect, electricians, GCs, etc.), many schedules and agendas need to align from the very start.

Poor planning makes goals and objectives unclear for members of the project team. It can create unrealistic expectations, ambiguities, and no clear visibility into who’s working on what — or when. It can also lead to errors and omissions in construction documents.

Formalized and standardized processes should be in place to kick off projects and make sure everyone has the information they need going into the project. For example, make it a best practice to pull the team together to talk through all aspects of the project, from site logistics and equipment delivery to non-negotiables and budgets. Doing so places everyone on the same page and helps ensure that the project is executable within a defined cost, scope, and schedule. Everyone can bring their expertise to the table to iron out details that might affect the project. From there, decisions should be documented and easily accessible to all parties.

Communication gaps and lack of technology

To avoid delays, mistakes, and rework, the project team needs to communicate at every step of the project. Keeping everyone up to date on things like schedules and change orders is critical. Doing so can also prevent minor issues from morphing into major upheavals.

Establish an appropriate communication chain of command to eliminate confusion about how updates are shared and determine who is responsible for communicating to which parties. For example, who communicates with the project owner? How will field-to-office (and office-to-field) communication be handled?

By abandoning long-held conventional tools, such as spreadsheets and paper documents, construction teams can reduce many of the inconsistencies and miscommunications that occur because of a lack of real-time information and updates. Communicating on a shared platform that gives all parties an appropriate view of the project can minimize confusion. This could involve email, apps or cloud-based software, or even scheduled daily/weekly meetings, depending on the needs and preferences of the project team. This way, productive information sharing is encouraged.

When potential problems arise, discuss them openly to determine how timelines and subsequent work may be affected.

A culture of competition versus collaboration

Traditionally, construction projects have been quite siloed. Each stakeholder or contractor is focused on their portion of the work, not paying attention to — or factoring in — what’s happening around them, which can lead to mistakes, delays, and conflicting work.

To promote a jobsite culture in which teamwork is valued, create an environment in which risks and rewards can be shared among all parties. When a problem arises, discuss it as a team so everyone understands the impacts and potential fixes. Encourage people to work together instead of competing. Promote transparency through communication at all levels so everyone has a voice.

Establishing an atmosphere that facilitates collaboration from start to finish can also reduce wasted time, money, and resources, while boosting safety and quality of work. In addition, it helps workers realize how valuable they are to the team — and how much their contributions matter to the project.

Misalignment of resources

Getting the right people on the right jobsite at the right time is one of the keys to ensuring productivity and minimizing downtime.

Placing too few workers on a jobsite could lead to mistakes, burnout, and possible injury, whereas overstaffing means your workers aren’t being used to their full potential. It’s also vital to make sure the workers on the jobsite have the appropriate skillset for the job.

To better align resources for your projects, create a resource management strategy that helps identify the right resources for each job, ensures their availability, and makes transferring workers between jobsites seamless. Tools are also available to help construction companies track worker skills, training, licenses, qualifications, and certifications all in one place to expedite decisions about where workers can be best utilized.

Poor cash flow planning

Steady cash flow is what keeps construction projects moving forward, but many factors beyond your control can affect how and when you get paid. Money is coming in and going out in overlapping intervals, and a breakdown in funds can negatively affect your ability to purchase materials, lease equipment, and pay workers.

Creating cash flow forecasts can identify potential cash flow shortfalls and surpluses so you understand when costs will be incurred and when revenue will be received. They help you better plan for various financial situations, create budgets to track spending, and identify when and where you may need to save to cover traditionally slower months.

To maximize how quickly you’re paid, be sure to include payment terms in contracts along with the penalties associated with late payment — and stick to them — so cash continues to flow throughout the duration of your project.

Obtaining a line of credit is also an option to provide you with ongoing access to capital to draw on to ensure cash flow. You can access some or all of the line of credit as needed, and you pay interest on the amount you borrow.

Maximize future project success

Improving project planning, communication, jobsite culture, resource management, and cash flow leads to happier clients, engaged workers, and more projects in the pipeline.

Get the right tools to make your construction projects a success by partnering with our experienced team at Wintrust.