Construction projects are not without risk from a variety of sources. Jobsite injuries are not the extent of risks facing the average construction project. Proper project management is a key element to risk mitigation. Here are several types of construction project risks and how to mitigate them.
Tropical storms and hurricanes are the biggest natural disasters we see here in central Florida. They render it impossible to work in such heavy winds and rains, and may even damage the progress already made.
Mitigate: Storm tracking and weather software help in some project planning and scheduling.
There are several contractual risks, but the primary one involves penalties you may have to pay for not delivering on time. This is technically a breach of contract and if the client wanted to press the issue, you would likely have sizeable penalties to pay.
Mitigate: Ensure that the project is delivered on time.
Scope creep, economic turmoil, fluctuations in pricing for materials and supplies, and many other issues factor into the financial risk category. Price increases on materials and supplies are a big issue to take into consideration.
Mitigation: Purchase supplies from a trusted source every time. You’re sure to get the best deal they can give you. Avoid scope creep by clearly defining the project scope early on.
Lack of communication is a big problem with stakeholder funding. Stakeholders who do not receive adequate updates may pull their funding. Lack of funding stops a construction project in its tracks regardless of the current situation.
Mitigate: Add permission for stakeholders to view the construction management software or cloud. This way they get real time updates the same as everyone else.
Construction jobs are dangerous. One out of every 10 construction workers is injured every year according to OSHA.
Mitigation: Educate everyone and enforce safety measures for everyone on the jobsite.
The construction business is very competitive here in central Florida. We see competition everywhere we look. You may feel pressure to match the price of a lower competitor, but keep your reputation as a builder in mind. You know what your work is worth. Don’t cheapen it by dropping your price too low.
Mitigation: You win some, you lose some. Don’t undervalue your work.
Miscalculation of the schedule, lack of construction project management, inadequate company policies, and many other things can put your project at risk.
Mitigation: Hire a construction project manager who can pull the project together.