Without money, construction projects will never begin. The construction management process is fuelled by money. Therefore, one of the most crucial steps in building a construction plan is creating a construction budget. This is another task that can be outsourced to a Virtual construction assistant.
A construction budget is an estimation of the amount of money needed to complete a construction project from start to finish, taking into account all related costs and expenses incurred along the building process. While the budget makes an effort to predict all costs associated with a construction project, you should leave some room for error to cover any unforeseen building expenditures or crises.
In all projects, BPP can be the negotiator between the stakeholder, contractor and subcontractors. For any project keeping invoicing and financials on track is crucial.
Keeping the allocation of money within the budget and on track is fundamental.
Managing variations and scopes of work with clear, crucial communications reduces impact and end-of-project surprises.
Virtual Construction project managers begin by analysing the project plan, which is typically a blueprint, to determine the materials that will be needed. It is necessary to take into account factors like job site preparation, which may involve spending money on equipment rentals, permits, and inspections.
The prices of construction projects, however, are distinctive. Therefore, it's crucial to comprehend construction project costs, which can be divided into three main categories:
Direct expenses: This includes tools, supplies, and labour that are heavy.
Normative Situations: These expenses are indirect expenditures and can be divided into three categories: preconstruction, construction organisation, and project operation.
Gain and Expenses: Overhead is the ongoing costs of running a firm, whereas profit is the difference between what you made and what you spent.
Virtual construction project managers can help with budgets and include all aspects relating to :
Property: This cost is dependent on where you are building and the scope of your project. This includes the lot price, real estate fees, financing and taxes.
Professional Fees and Services: These costs relate to professional consulting, including permitting, surveying, testing, architectural and design, master planning, structural, electrical, mechanical and civil engineering, accounting, banking and real estate fees.
Materials: Unlike other costs, materials expenses can be negotiable, especially if you have a relationship with your suppliers. Material costs tend to be a large portion of your construction budget and are usually broken down into two categories: site preparation and building structure.
Labour: This is the cost of your tradespeople, subcontractors, equipment operators and other human resources. Keep in mind not only hourly wages but also workers’ compensation, vacation and sick time.
Equipment and Tools: The material and labour costs will inform the selection of equipment and tools, which helps you determine what you’ll need to rent for the job. Remember to include delivery, operating, fuel and maintenance costs.
Project Management: Project management methodologies help organise and monitor a budget to avoid overspending. Consider the costs of construction project management software, as well as any office space, utilities, internet connection, phone expenses and office supplies.
Insurance and Bonds: All construction projects are legally required to carry insurance. There might also be a deposit or bond required as a show of faith that your company is going to follow through and ensure all subcontractors, tradespeople and suppliers are paid. This is especially true if working on a governmental project.
Gas, water, sewer, and electric costs related to the construction site are included in the category of utilities and taxes. It's also possible that municipal and state taxes apply to the development project. The size and type of construction project you're supervising will affect these rates.
Contingency: This is where you provide your budget breathing room to accommodate unanticipated charges and expenses. This includes items like scope adjustments, design or material improvements, equipment breakdowns, accidents, and acts of God. Your contingency fund typically represents three to ten per cent of your overall budget.
Our specially focused Virtual construction assistants help with forecasting, estimations and all projects' CPI (Cost performance index), and EPC (End project costs).
Get in contact today to keep your projects financially on track and within the budget.