RISK! It’s Not a Game for Contractors
Because of these complex workflows, construction is ripe for errors, mistakes and other risks that can add onto already challenging construction project management responsibilities. In fact, contractors have among the slimmest profit margins of any business, as they’re on the hook for costs up front in most construction contracts, typically being paid in installments as work progresses. That means the more things that go wrong, the more potential profit contractors might have to eat.
So, what goes wrong on construction projects? The actual construction contract itself can make or break a contractor’s bottom line right from the start. Today’s contracts are often very detailed and can involve multiple rounds of legal review and revision before final agreements on the scope of work. Most successful contractors today have good processes in place to ensure their interests are protected. However, sometimes contracts themselves can come back to bite them if not scrutinized well enough.
The scope of work is just one challenge. Here’s a look at six more common construction risks that contractors can incur, as well as the one thing that can help prevent all of them: