Managing the finances of a construction project can be like running a marathon, it requires endurance, strategy, and the ability to adapt when things don’t go as planned. Whether you're building a luxury custom home or managing a preplanned development, one thing remains constant: strong project financials are the foundation of success.

In the latest episode of Builders, Budgets, and Beers, we sat down with Nathan Marsala from The Bison Group. He shared some golden nuggets on how custom home builders can strengthen their project execution and financials by focusing on four key areas: document control, communication, relationships with the right subs and trades, and of course, managing and communicating those inevitable change orders. Let’s dig into these insights and show you how to lay the groundwork for a financially successful project.

The Foundation of Strong Project Financials

Before you even break ground, strong project financials start with preparation. From setting realistic budgets to having the right documentation in place, what you do before the project starts will determine whether you stay on budget and on schedule or end up scrambling to cover unexpected costs later on. Nathan emphasized that if your pre-construction (precon) phase is poorly managed, your project is already heading for trouble.

The foundation of a financially strong project starts with the precon phase, and it’s all about planning. But while precon is critical, what happens during the build is just as important. You need to manage those financials like a hawk, especially when (not if) things change.

Document Control in the Precon Phase

The success of your project hinges on having complete and accurate documentation right from the start. Incomplete or unclear documents are the fastest way to blow through your budget, miss deadlines, and make your life harder than it needs to be. Nathan couldn’t have said it better: “It’s impossible to run a smooth project if your docs are a mess.”

What we’re really talking about here is document control. When you have detailed plans, drawings, forecasts, contracts, and scope in order, you’re not only protecting yourself but also setting your team and client up for success. Missing or incomplete documentation leaves too much room for costly mistakes. The clearer and more organized you are at the start, the fewer surprises you and your client will face along the way.

Oh, and by the way, when you have everything documented properly, it makes dealing with change orders so much easier. Which brings us to…

The Role of Change Orders in Financial Management

Ah, change orders, the curveballs that every builder expects but still dreads. Whether it’s because a client wants to upgrade their countertops or because of unforeseen issues on-site, changes are inevitable. But the key to keeping those changes from derailing your budget? Proper change order management.

Nathan talked about the importance of staying on top of change orders and how they can either make or break your project’s financials. Every change, no matter how small, needs to be communicated, documented, approved, and reflected in the budget. If you’re not keeping track of these adjustments, your financials can spiral out of control faster than you can say “cost overrun.”

The best way to manage change orders? Get ahead of them. When you set up clear documentation and maintain open communication with your clients and subs (more on that in a bit), managing changes becomes a whole lot easier. And the best part is that with tools like Adaptive, you can make this process almost painless, ensuring nothing falls through the cracks.

Communication Is Key

Here’s the thing: no matter how perfect your plans are, if communication breaks down, so will your project. Nathan was clear about this consistent, transparent communication with clients and subs can make the difference between a project that’s running smoothly and one that’s in constant firefighting mode.

Make sure you’re checking in regularly with everyone involved. This doesn’t just apply to the beginning of the project but throughout the entire build. When communication is strong, your team knows what’s happening, your clients know what to expect, and any changes that come up are handled smoothly.

Good communication is also critical when it comes to managing change orders. By keeping everyone in the loop, from the client to the subs, you avoid misunderstandings, reduce decision fatigue for your clients, and stay on top of any financial implications.

Building Strong Relationships with Subs and Trades

Now, let’s talk about your subs and trades. The success of your project isn’t just about what you do; it’s also about the people you bring on board. Having the right people on your team, those you can trust to show up, do great work, and stick to the budget, makes all the difference. As Nathan pointed out, having a good relationship with the right subs and trades is non-negotiable.

Vetting your subs and trades properly and building long-term relationships with them is key to keeping your projects running smoothly. Good subs mean fewer delays, fewer errors, and fewer budget surprises.

How Adaptive Simplifies Change Order Management

Managing change orders is one of the trickiest parts of any build, and this is where Adaptive shines. With Adaptive, handling change orders becomes a breeze. Whether it’s a client request or an unexpected issue on-site, you can track and account for changes in real time, and ensure that every adjustment is reflected in your budget.

Nathan shared how crucial it is that nothing falls through the cracks. With Adaptive, you won’t have to worry about chasing down paperwork or wondering if a cost adjustment was missed. Everything is documented, tracked, and easily accessible, so you always have a clear view of your project’s financials. This keeps your projects on time, on budget, and stress-free.

Tying It All Together with Strong Financials

At the end of the day, running a smooth, financially sound project comes down to three things: good document control, clear communication, and strong relationships with your subs. Get those pieces right, and managing your financials becomes a lot easier. And when things do change (because let’s face it, they always will), Adaptive’s tools make managing change orders seamless, so you can stay on top of costs without breaking a sweat.

Ready to streamline your next project and protect your profits? Start using Adaptive’s change order management tools and watch how they transform your business.

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