Steps to Plan and Maintain a Construction Budget

Steps to Plan and Maintain a Construction Budget
  • Author: Mahtab Idrees
  • Posted On: June 28, 2021
  • Updated On: July 3, 2023

Managing any construction project requires great planning skills. Whether you’re carrying out a renovation or building an extension to an existing property, you’ll need to have every little detail worked out before work can commence.

One of the areas that require the most attention to detail is the construction budget. This is the plan of how much you intend to spend on making the project a success.

Whether you’re creating a new home construction budget spreadsheet, or a construction budget worksheet for a commercial project, the fundamentals are the same.

In this article, we’ll talk you through how to create a construction budget template for your next project.

Why Is Your Construction Budget So Important?

A construction budget will be used to work out how much a given project will cost, whether that be home renovations or a new building. A general contractor will be responsible for developing the budget with the assistance of professional estimators as well as using quotes from contractors and suppliers.

The budget might often determine how quickly a project can be completed. It will be pre-planned and will allow you to be as productive and efficient as possible while keeping costs in line.

Planning Your Construction Budget

When planning your construction budget, you will divide everything into hard and soft costs.

Soft costs are any expenses that aren’t directly related to the actual construction of the project. This will be any pre-or post-construction services that may be required. Typically, this accounts for around 30% of the total budget.

Hard costs are things related to the actual construction of the project. Because these costs are tangible, it is easier to make estimates for how much you’ll spend. This should account for around 70% of your total construction budget.

What’s Included In Your Construction Budget?

The first thing that should be included in your construction budget is property costs. This refers to any land that will you’ll build on. Don’t forget that land costs don’t just stop at the land itself, it also includes real estate fees and any legal costs associated with the purchase.

Next to factor in our professional service fees. This will include architects, surveyors, engineers, and building permits.

A large proportion of your budget will be material costs. Remember to factor in anything that will be required at every stage of the building process.

Predicting labor costs is vital. When factoring in wage costs, think about workers comp insurance, vacation time, and any sickness. You may prefer to use a contractor such as Emerson Masonry Inc.

The next thing to think about is equipment and tool hire. Not only will you need to think about the costs involved in hiring this equipment, but you’ll also need to think about the running costs.

Finally, you should think about insurance and taxes. Once you have worked out your budget, you’ll need to include a contingency in case anything goes wrong.

How to Plan and Maintain a Construction Budget

When creating a construction budget you’ll need to be very thorough. Incorporate all of your hard and soft costs into your construction budget template.

Remember to shop around and get written quotes for every aspect of the project.

For more helpful articles, check out the rest of the site.

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Author: Mahtab Idrees

Mahtab is all about lifestyle, home improvement, and interior decor trends. Her role as associate editor at ConstructionHow has helped her to offer genuine ideas, information, and intricate details about the special home editorial projects. As an interior designer by profession, she is solely focused on the latest trends and shares homeowner’s concerns as she also is a proud homeowner of two properties in mainstream locations.