It is right to calculate the budget.
I am often asked how realistic it is to stay within the planned budget during construction or relocation. I will say from my experience: 100% of the budgets calculated by us were executed precisely or with savings. What should be taken into account in the calculation of the budget and what are the professional tricks for the accurate execution of the budget?
The project's well-calculated budget determines its success
What is the project budget?
This is a comprehensive assessment of all costs for the project, from the idea to commissioning or relocation. The budget takes into account all the financial costs of the project. And if the project schedule I would compare with the heart rate, then the budget is definitely the blood of the project. Proper budgeting is the key to the successful implementation of all plans and tasks without exception.
Re-budgeting is still at the stage of economic examination.
Today I want to focus on the practical points of budgeting and implementation.
What is the budget of the project (on the example of relocation)
We add up the budget from all the costs at key stages of the project. Let's say we have to calculate the relocation budget. We contribute the following costs to the plan.
For rent, among: risks of exiting the contract, double rent, if it arises due to the large volume of construction, rental costs for the new office.
Design: design, engineering design and the preparation of a working package of documentation.
For operation after the commissioning of the facility: utility and operating costs.
Management costs.
We, as a management company, calculate how much the design will cost, detail how much the construction costs, project management,construction control.
In addition to these project costs, there are operating costs that can be significant. Here are just a few items of such expenses:
- Directly the cost of the move itself (packing, transportation, climb to the floor);
- Furniture, including non-standard;
- Office furnishings: soap dispensers, towel holders, hand dryers, etc.;
- blinds and curtains;
- Kitchen equipment
- IT equipment.
If the reason for the change of office was the growth of the company and the number of its employees, then it is likely to increase the cost of life support of the office. The cost of cleaning, water for coolers, security will increase. Let's not forget that it will be necessary to change the address, registration in the new tax.
When budgeting for the customer, we are sure to take these issues into account and specify in the list of expenses without calculating the specific cost. The customer can fill out these articles on their own or entrust the budgeting to us.
Internal design of the office, in particular branding or phyto design, is not included in the services of the general contract. The customer can do it on his own or again instruct us on a separate contract.
Once all upcoming costs are taken into account, the result of the effort is a summary table and a graph of all upcoming expenditures, both capital and operating. This is the budget of the project.
Capital and operational expenses taken into account in the ready budget
In my projects I work only with the budget, which I made, and the customer accepted and approved. I am not interested in the budget, which the customer has at all, as I have no goal to draw all possible money. My goal is to make the most high-quality, efficient and effective project. I named the price for which this project will be implemented 100%, the customer accepted it, and everything else remains bracketed.
How accurate is the project budget?
I sometimes hear the question, "What if we go beyond the budget?"
In 100% of cases, Office Times project budgets are fully accurate.
The reason for the high accuracy of calculations is simple: we consider the budget not at theoretical "market prices" but on our real projects and costs. We are practitioners, or rather practitioners. Therefore, our prices are not taken from "prices on the Internet." These are current, active positions on equipment and materials.
I have in the arsenal a useful reception: the preliminary cost I always count with the coefficient, lay the percentage of costs higher. In the process, the price is usually optimized.
A real example: I have already optimized my budget for one of the current projects by 44% (in monetary terms - by 600,000). But in another section of the same project, the customer "demolished" part of the cost, although the functionality of the project will still require them. Therefore, optimized funds will help to close the budget hole.
Our preliminary budget does not change in a big way, except that the customer wants to allow overspending.
All our budgets are implemented 100% or with savings. At the same time, those that are implemented by 100%, also in most cases had savings, but many customers, seeing the savings of 1-2 million, decided to spend them on unplanned earlier improvements. For example, instead of film, use marker paint, which is more expensive and looks aesthetically pleasing, although functionally both materials are the same. Or instead of blinds hang Roman curtains. Or, as was the case in one of the projects, the customer decided to spend the money saved on the purchase of furniture class above the one that was planned by the budget.
When is the overspend
And yet overspending sometimes happens, but it happens only at the request of the customer. If a person wants a table made of natural wood handmade or a lamp of a certain manufacturer, ready to pay for it - then I can not refuse it. Although in this case I definitely offer alternatives that fit into the budget.
A real example. The customer wanted certain lamps in the office. I offered him some alternatives, but that's what he wanted. They cost 10 times the price of the proposed options, but he wanted them, and that's his right. Such moments are impossible to take into account in any budget in advance, however they happen.
The reason for the overspending of the budget may be the desire of the customer, for example, the requirement of exclusive furniture
Techniques for saving the real budget
You can save on materials or technologies, but in order to optimize the budget without losing quality, you have to become an expert in construction. There are a number of professional techniques that will allow you to stay within the planned budget.
Working with contractors and suppliers
The budget depends on the level of companies that the customer invites to tender. Named, large and expensive contractors have on the balance of their own specialists, equipment and resources. Medium-sized companies have full-time employees, and large construction equipment and sophisticated tools are rented. Small contractors, as a rule, have neither full-time employees nor staffing equipment and work on a contracting method. They're the cheapest.
Choosing a certain category of contractors, you can adjust the budget.
There are mechanisms that we use to evaluate the offers of suppliers or contractors and to preserve the cost of the budget. For example, from experience I know exactly how much profit the contractor puts into the tender offer, so I can estimate whether his offer is "last" or there are resources for optimization. We stop excessive cheating and this seriously save the budget of the customer.
When we analyze the project, we compare not only the holiday prices, but also the purchase prices from different suppliers to enter the budget.
Expert analysis of supplier price offers will help to save the budget
Working with designers
At the design stage it is necessary to take into account not only aesthetics, but also operational nuances. If the designer offers a carpet that looks perfect, then I need to know if it has fire safety, whether it can be operated in high-load office environments, and so on. That's why when I develop design documentation, I always analyze what the engineer or designer offers. I always ask what materials and what money they cost, analyze the information, based on my knowledge of the market and the prices on it.
About how to save the budget of construction,I have already told.
To calculate the budget, you need to clearly represent the sequence of actions at all stages
One of the main rules for budgeting and subsequent implementation is constant monitoring of each action and task. You should always have spare options to replace too expensive technology or design solution. The preliminary budget of the project can be drawn up on its own. But in order to detail, optimize and implement the project, remaining within the budget framework, will require the help of experts.
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