Helpful Advice for Keeping Commercial Construction Costs Reasonable
As the weather warms up and new plants start breaking through the ground, many commercial building projects prepare for groundbreaking, as well. All these new building sites can inspire others to step forward with their own plans for new construction or updating existing structures. One of the first concerns for anyone preparing for a commercial construction project is the cost. It can be difficult to find ways to keep commercial construction costs reasonable, while still meeting building codes, including all the functional details of the design, having an esthetic design, and getting it all done in a timely fashion. It has become common to expect 15-25% in cost overruns. Commercial construction lenders typically recommend a 20% contingency in the lending terms because of this expectation. There are few things to consider before starting a commercial construction project that can help reduce the cost of overruns.
The first consideration for any commercial construction building project should be figuring out a realistic project budget. Much like financing a house, it’s best to figure out how much you can get in financing before deciding on a plan that you can’t afford and having to make unsatisfactory changes before or during the project to bring the concept within the actual budget. Take the time to research funding options. Some commercial construction companies can make recommendations for lending institutions and other options for figuring out and paying for a realistic project budget.
One of the best ways to keep costs down is to work with a design build firm. The idea is that all of the planning goes on with one company, which reduces some of the most common causes of change orders outside of budget issues: long communication times and the risk of miscommunication between companies. When the design is done by one company, the engineering by another company, and the building done by yet one more company, there has to be extra communication to bring the design to fruition. By having all the parts of the project handled by one design build company, a design and build plan can be put in place from the start that is more thorough and less prone to omissions, errors, or confusion. The basic process used by an experienced design build firm is site evaluation and building cost budgeting, project coordination, special services agreements and complete project management. This process keeps all of the responsibility in-house and significantly reduces the inefficiency that is generally to be found and has even come to be expected in the commercial construction industry.
While it’s a common misconception that contractors make more money through change orders and delays, problems with the project makes for bad business for everyone involved. Having delays in any commercial construction project means increased costs for the contractor, as well as, the owner and results in delayed project completion dates, lower initial ROI and income for the owner and the potential loss of new projects for the contractor. It also creates friction between the owner, general contractor, and subcontractor. By working with a design build firm, the whole process of the commercial construction project is significantly simplified. A good design build firm can handle the project from start to finish optimizing communication, organization, flexibility, and accountability.
Another important aspect of keeping costs down and avoiding unnecessary change orders is to make sure that the construction design plan has taken into consideration all of the owner’s needs and that the design is feasible. Many change orders result from designs that weren’t checked enough for flaws or that did not fully cover the actual scope of the project. A design build company will make sure the design matches the needs and wants of the owner, as well as, making sure that the design is checked by engineers for feasibility and builders for optimizing the materials to be used. Having an ideal construction design plan in place reduces change orders that could have been prevented simply by making sure the design covered everything and was planned out correctly.
It’s commonly understood that time is money, and you can expect an experienced design build company to be efficient and have a high level of productivity. Working with a design build firm makes it easier to not only create an ideal construction design plan, but to set a reasonable and realistic construction schedule. Having a commercial construction project completed on time significantly impacts the ROI and future income for the owner and increases the positive reputation for all the others involved in creating the project. A design build firm’s reputation is important for garnering more new clients, referrals, and repeat customers.
Planning and implementing a new commercial construction project can be a long, time consuming, stressful process with high costs. Having a design build company that you can trust goes a long way towards reducing some of the stress that goes into the commercial construction process. In addition a good design build firm streamlines the process to make the whole project go more smoothly from start to finish and results in a completed product that achieves the owner’s goals and that the commercial construction team can be proud to have built.