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A Guide To Risk Management For Homebuilders

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When it comes to building a home, there are so many things to consider. Whether it’s small things like what faucet or window covering to use, or big matters such as project agreements and professional negligence claims, you need to be prepared to manage peril.

This kind of management involves preparation. That means, being as organised as possible so that everyone and everything involved in the construction program is safe. This kind of all-encompassing organisation is key to ensuring that the future of the build isn’t jeopardised.

3 step risk management process

The term risk management is quite broad. It involves everything from accounting for the people on the building site, acquiring the correct materials, and taking weather conditions into consideration.

Any uncertainty towards the aforementioned examples can result in peril. During construction, it’s a risk that causes plans to crumble and fail. This failure can take many forms, from budget deficits to compromised overall construction quality.

On top of everything else, dealing with these threats can feel overwhelming. Instead of giving up on your dreams of erecting your very own dwelling, simply engage in a 3 step risk management plan.

Step 1: Assess

The first phase involves assessing the perceived dangers, be they physical or associated with those physically working on the design. To do this, you must analyse the environment in which the work is taking place.

Analyse and consider all factors, whether they are big or small, for every individual working on the project. By conducting analysis, you can work with the key people and get targets in place for what needs to happen and when.

By having a realistic plan in place, you are ensuring that the build can run smoothly. As seasoned builders know, one missed timeline or unrealistic quality standards can substantially set the timeline back.

Step 2: Assign

The second phase involves assigning the risk to those individuals who will be responsible for them. Put all perceived threats into a spreadsheet and assign a rating on a scale of 1 to 5. This scale specifies the degree of risk for each task.

By having all the information on one document, tasks, whether they are high or low risk, can be identified, prioritised, and assigned to one individual or team. This assigns responsibility and makes sure that each person on the site is aware of their role and how to manage it.

Step 3: Mitigate

The third and final phase is to plan, prepare and mitigate all potential dangers. This may include deciding on the best route to achieve objectives while also working to minimise any detriments to the project as a whole.

The process of reduction and elimination can be achieved through simple measures. This includes procedures such as producing checklists, conducting regular safety meetings, and meeting regularly with contractors.

The cost of building a home

Erecting your own home from the ground up is a significant investment. The average price difference between a low square metre and a high square metre build is quite significant.

The cost of low square metre builds can start anywhere between $1,400 and $1,800 per square metre. While the price of high square metre properties can cost between $2,700 and $5,100 per square metre.

These figures show just how important it is to ensure a seamless build. Otherwise, the overall cost of the house could be exacerbated by factors that should have been mitigated during the risk management process.

Managing risks when building a home

When it comes to constructing a residence, there are a lot of moving parts. This means that any number of things can go wrong. With so many people at the property working in many different capacities, it’s important that all perceived dangers are acknowledged and mitigated.

By actively preparing for forks in the road, you are putting yourself in a position to minimise and even eliminate the potential effects of many factors from weather to unrealistic time frames and quality standards. This kind of preparation goes a long way to ensuring the seamless creation of a high-quality property.