What Is a Budget Estimate?
One of the critical early steps in any commercial construction project, sometimes even before developing a detailed floor plan, is to develop a budget estimate. This type of budget can be used for business planning, project financing, and feasibility studies.
How Are Budget Estimates Prepared?
Some general contractors will provide a rough Budget Estimate by gathering information such as project type, location, and size, and then applying historical construction per square foot costs. Although this type of square footage cost estimate can be done very quickly, it typically results in a budget accuracy of around +/- 40%.
BelVan Construction prefers to develop more detailed Budget Estimates by breaking down the anticipated scope of work to allocate a cost budget for each major area of work (see sample estimate on pg. 2). This type of estimate is a fair bit more time consuming but results in a more realistic budget with an accuracy of +/- 30%.
What Is Included In A Budget Estimate Prepared By BelVan Construction?
Typically, 1/3rd of the overall budget represents the non-construction cost items of a project, including items such as:
- Architectural Design & Engineering
- Permits & Fees
- Project & Construction Management
- Site Supervision & Safety
- Rental Equipment and Site Facilities
- Site Protection & Signage
- Quality Control Testing & Inspections
- Contractor Overhead & Profits
- Contingency (funds set aside to accommodate unanticipated conditions & changes)
Typically, 2/3rd of the total budget represents the cost of the actual construction materials, labor, and subtrades, including items such as:
- Interior Wall & Ceiling Systems
- Fire protection