Budgeting is one of the hardest parts of planning a commercial remodel. If you're a business owner about to begin a remodel for your business, developing a realistic budget is one of the first and most crucial steps.
In this comprehensive guide to creating a budget for office renovation, we'll discuss the major cost variables like materials, labor, and design services. When you hire a professional contractor and architect for the design and construction of your remodel, knowing your budget can help guide your project. Communicating this information with members of your team can keep everyone on the same page and prevent cash flow problems later in the process.
Here's what you need to know.
Office renovations are made up of many parts, including materials, labor, permits, and design services.
Materials include everything from lumber to the finishes and fixtures used in your construction project. This category includes electrical components, lighting, glass, doors, flooring, and more.
While your contractor may not detail the cost of all materials for your project, the contract may include a list of allowances and their costs. Allowances are amounts estimated for fixtures that have not yet been selected. For example, your contractor may set aside an amount of money for the estimated number of light fixtures in your project. The contractor will name the dollar amount and the number of light fixtures. If the amount you spend on light fixtures is less than the amount on the allowances list, then the contractor will adjust the final cost of the contract accordingly.
High-end contractors pay a lot for labor. They hire skilled workers with experience in the construction industry, and then train them extensively on their policies, safety procedures, and how to use their tools. These workers are worth the money spent because they have the knowledge to do the job right and safely.
Commercial projects frequently involve architects providing design services. Often, this is a regulatory requirement. Your contractor can let you know if you're supposed to have an architect for the work. When working with an architect, communicate your budget with the architect.
While the architect will not control the bid price from the contractor, the architect can estimate the final cost of your project as they're creating the design. Good architects do their best to create designs that are realistic for your budget.
Permits are an unavoidable cost of some office renovations. Your contractor can tell you whether your office renovation requires a permit, and if so, how much the permit will cost.
If you're on a tight budget, there are many things you can do to save money on your office remodel.
Many businesses request that contractors avoid operations during business hours. Some businesses will try to fit projects in while workers are on break. This increases the bid price and slows the project down. Avoiding placing time constraints on the project can help control costs.
Changes made to the project once the project is underway can slow the project down. Changes can also increase the cost more than if the work had been included in the original contract. Avoid making changes once the work gets started, unless it's really important.
Make a list of goals for your project in the very early stages of the planning process. Knowing these goals and sticking to them can help you avoid going over budget.
When it's time to shop for fixtures, your contractor will point you in the direction of a supplier. As you're shopping, know the cost of each allowance and avoid going over the amount on the allowance list.
Unexpected expenses can arise during office remodels. These expenses can come up for different reasons. Sometimes, when remodeling existing buildings, rot or structural problems are identified. These problems need to be resolved before the project can proceed.
Often, the client's project manager will realize that an element of the design simply doesn't look right given the space. This can lead to changes of all kinds during the construction project. You will have to prioritize whether these changes are worth the increase in price. Your contractor should write a change order that details the cost of the change and how much this will affect the final cost of the project. Both parties should sign the change order.
Hold back some amount of your budget to cover unexpected expenses. If you're getting financing for your construction project, the bank may ask you to hold a contingency amount of 10%, to be reserved for such a case. This gives you room to make decisions as issues come up during your project.
Not sure how much you can expect to spend on your construction project? Having a hard time setting a budget amount? Meet with a contractor to discuss your project before creating a budget. During the discussion, the contractor can give you an estimate that will help you as you're seeking financing and setting the parameters for your project.
Get help with your construction project. Start by meeting with a reliable contractor. Contact Litchfield Builders, or download our free guide to help you find a Connecticut contractor for your needs.