Many construction projects exceed their set budget for a number of reasons, including unexpected challenges and poor planning, and they can fall apart without a well-established budget. To ensure success of your project, you must create a budget that allows you to prepare for potential delayed completion dates, unforeseen structural problems, and other hidden costs so that you can finish on time at the right cost. Continue reading to learn more about the importance of budgeting and how to make sure that you budget right for your project to succeed.
Before drafting a plan for your project and your budget, you must first have an achievable vision for the property. This includes matters such as the primary use of the building, general design ideas, desired completion date, and a rough approximation of how much cost you can tolerate. It is better to use as many specifics as possible to therefore create a more accurate budget. Not only is the budget a cost management tool, it is also an effective measuring stick for how well the construction management is performing throughout the project’s duration.
Given that each instance of commercial construction is unique, there are plenty of items to consider when drafting your budget that set it apart from other projects you have done before. Any construction project will require you to consider permit issues, site preparation, insurance, and so on. There are many costs to consider and fortunately, most cities provide “contractor checklists” for project submissions that cover all these possible expenses.
Know the Different Types of Costs
Construction costs can be divided into three separate categories: hard, soft, and site. “Hard” is an umbrella term that covers the costs of the actual physical construction, including things like excavation and site preparation as well as the labor and equipment costs necessary to facilitate those services. Soft costs are not as recognizable because they cover the “behind the scenes” fees, such as construction insurance, financing, and permits, that are just as important as the physical construction. Finally, site costs encompass the pricing of land costs, surveys, and demolition of any site impediments which are still necessary for the safe completion of your project.
By its very nature, construction can be wildly unpredictable due to several factors at play including weather and machinery. As such, your budget should factor in “surprise” costs that will not be such a surprise if you plan for them. A good rule of thumb is to reserve at least an extra 5% of the budget for unforeseen circumstances so that these incidents neither exceed your budget nor set the project back. To properly account for any unexpected costs, it is vital to acquire a full understanding of the codes and restrictions that apply to your building before you begin construction. This includes possible requirements for things such as water fountains and wheelchair ramps.
An ineffective budget can lead to omissions, errors, delays, and even a failed project. Ensure the success of your construction by solidifying your vision for your project, understanding all building codes, and accounting for any possible hidden costs. At Bomar Construction, we will work with your needs to deliver a final project within the determined budget that everyone can be proud of. Contact us today so our team of building contractors and commercial builders can bring your vision in Volusia County to fruition. We offer commercial construction in Daytona Beach, Palm Coast, and Ormond Beach and your satisfaction is always our top priority!