Do you want to clearly understand the anticipated construction costs of your commercial construction project? Effective budget estimation is the key.
Many people are heard talking about budgeting for construction projects. However, not everyone understands that to reap the benefits of budget estimation, it is important to ensure that the estimate is realistic and effective.
At this point, it is imperative to understand that only someone who has bona fide knowledge of the industry is capable enough of performing budget estimation.
Some general contractors will provide a rough budget estimate by considering information such as project type, location, and size. A basic per square foot cost is calculated based on this information. Although this type of square footage cost estimate can be done very quickly, it typically results in a budget accuracy of around +/- 50%.
At BelVan Construction , we prefer to develop a more detailed budget estimate . Our team of experts breaks down the anticipated scope of work to allocate a cost budget for each major area of work. This type of estimate is a fair bit more time-consuming but results in a more realistic budget with an accuracy of +/- 25%.
The Benefits Of An Effective Budget Estimate
In this blog, we outline some of the benefits of budget estimation to help you understand why effective budget estimation is necessary prior to any commercial project.
Your Project Will Not Go Off-Track
An effective budget estimate takes into account factors like:
- Architectural Design & Engineering
- Permits & Fees
- Project & Construction Management
- Site Supervision & Safety
- Rental Equipment and Site Facilities
- Site Protection & Signage
- Quality Control Testing & Inspections
- Material and Specialty Trade Costs
- Contingency
Hence, there is very little room for going off-track. Projects usually go off-track when there are too many expenses unaccounted for, but this can be tackled by creating a thorough budget estimation.
Also read: Risks In Western Canada’s Construction Market And How To Mitigate Them
You Will Save Time And Money
Budget estimation helps you understand how much money you are likely going to need to spend on different elements of the project. Once the budget estimation is complete, you can take the required steps to either adjust the scope to get to a budget you are comfortable with, or move forward with the work and ensure that the construction stays within the budget.
In addition to this, efficient project budget estimation provides a way of measuring the efficiency of the project by comparing actual costs with the projected costs.
Improved Project Management
You might have heard about commercial construction projects that were halted because they went way over the allocated budget or because the allocated funds were exhausted. This is exactly what thorough budget estimation helps avoid.
It helps the project manager, the stakeholders, and the designers get a general idea of how much time, effort, and money it will take to get the job done. Hence, when all this is done in the pre-construction phase, it helps streamline the project management process.
What Happens If Budget Estimation Is Not Done?
As mentioned, the success of a commercial construction project greatly depends on a well-planned budget. Without proper planning and budget estimation, there is a high chance that the project will be susceptible to unexpected cost and time overruns.
In the absence of budget estimation, you can expect a lot of negative situations to occur. One of them is not being able to deliver the promised quality in a timely manner.
Remember that by spending some time on budgeting and planning in the beginning, you can avoid unwanted surprises during construction.
About Us
BelVan Construction is a premium constructioncompany servicing Alberta, Saskatchewan, & BC. We are qualified commercial general contractors based in Edmonton and we have been offering various services, including general contracting, project design-build, pre-construction consulting, and construction management services since 2011.
Right from the start, our primary focus has been on providing our customers with premium yet affordable construction and renovation services in a respectful, responsible, and reliable manner. In each of our commercial construction and renovation projects, our goal has been to make the clients’ needs our top priority with a commitment to providing excellent all-around service.
Contact us when you’re ready for Edmonton’s leading commercial general contractors to build yourself an effective and productive commercial space.
