5 Tips for Managing Your Budget During Build-out

When you’re modifying a building to make it fit for purpose, the construction process can get pretty daunting and stressful, especially if you’re not experienced in design or construction. And understanding all the construction costs becomes overwhelming quickly. If the project doesn’t go as planned or falls behind schedule, you lose time, money, and probably sleep, too.

If you’re starting a new build-out, these tips will help you keep to your budget.

1. Be prepared. Start the design and planning for your new space as early in the process as possible. Schedule the test fits, conduct your market surveys, schedule financial analyses, and make construction decisions sooner than later. Beginning these activities earlier not only spreads out the timeline, but it also limits the potential impacts of unexpected delays.
   
   One area often responsible for delays? The permitting process. It’s time-consuming to file and wait for permits. And if your permit is denied, it gets more expensive, too. Plan ahead and have all the information you need to fill out your permit application accurately.
   
   
2. Choose the right team. Your build-out includes a team of contractors, trades, consultants, and vendors. Vet each member carefully, and ask for recommendations and testimonials from each potential collaborator’s former clients. Visit other build-outs they’ve completed in the past to see if it matches your vision.
   
   
3. Understand market conditions. Preparing for your build-out requires knowledge about current market conditions to help avoid unpleasant surprises — and make sure your build-out budget and expenses align with the current market trends.
   
   Factors to consider include labor supply. Right now the market is tight, so if there aren’t enough people available to work on your build-out, the timeline may stretch out, which could add to your costs.
   
   Do your due diligence to understand the average tenant improvement (TI) allowance in your area, too. And whatever your budget, add an extra contingency allowance to cover unexpected expenses and act as your financial safety net.
   
   
4. Value engineering reduces commercial construction costs. This process — finding alternative solutions that achieve the same result while reducing construction costs — can help you save money on materials and methods while staying true to the original plan.
   
   Value engineering might include opting for less expensive carpeting or finishes, using a wireless internet instead of wired connections, or choosing standard rather than custom build furniture. To help make those decisions, decide where you most want (or need) to splurge and where your dollars get the most bang for the buck.
   
   When you take a value engineering approach, focus on spending your budget in areas where your clients will be — the waiting room and examination rooms, for example — and less on non-client-facing spaces. But don’t mistake this approach for short-changing employees with a less-than-comfortable break room, for example. Consider your staff’s needs and comfort levels, too.
   
   Still, value engineering helps you stick to your build-out budget and make changes on the fly when you see an opportunity to save. If you’ve hired a project manager, lean on their expertise and connections with other contractors to find places to trim your budget.
   
   
5. Hire a project manager. Find and hire a reputable project manager, unless you’re overseeing the build-out yourself. These valuable team members become the eyes and ears on your construction project and handle everything like:
   • Planning and design
   • Budget development
   • Construction management
   • Organization
   • Scheduling
   • Move-in
     
     In short, they handle the headaches so you can focus on your business goals. Experienced project managers have years of relationship building and connections to consultants, general contractors, engineers, vendors and other service providers in the industry.
     
     They’re the perfect resource for helping you define your project scope, communicating updates on the process, telling you about issues, and helping strategize solutions. When you work with a project manager, you’re more likely to stay on (or under) budget, complete your project more quickly and efficiently, and have fewer headaches during the process.
     

If you’re ready to start a build-out — or just beginning to explore the process, learn more about how MDent Consulting can help you.