When you are facing a move and subsequent build out, having a contingency plan can help you keep everything on time and on budget. The unexpected often happens during a build out, and whether it is minor or extensive, you need to plan ahead to keep your business on track. Your build out requires lots of detailed planning, and adding a contingency plan can ensure your project stays on budget and keeps your business growing successfully. Let’s explore some points to keep your costs on budget during your build out.
Meticulous Plans Mean Less Change Orders
Change orders can destroy a timeline as well as a budget. Why? Change orders add cost, regardless of how simple or complex the reason. From the placement of an electrical outlet to a complete redesign, change orders alter timelines and budgets. On the other hand, if you have developed your plan down to the minute details, change orders will be less likely, keeping your project on time and on budget.
Always Have a Contingency Line Item in Your Budget
Here’s the scenario, you’ve hired your build out construction team, the work has begun and there is an issue with one of your permits which brings the project to a halt. Your team of employees won’t be able to begin work on the timeline you’d hoped for, and having a contingency line item can help you keep the team you’ve assembled on the payroll and prevent them looking for another job, which means you need to hire replacements.
Yes, You Need an Active Line of Credit Available
Having a line of credit available throughout your project will provide needed funds should your project need additional funds as the result of an unexpected issue during your build out. A line of credit allows you to draw on the funds if you need them, when you need them. You only pay interest on the line when you use it and only on the amount you use, a much better solution than overextending your credit card or scrambling to cover an unexpected expense. A line of credit, while charging a slightly higher interest rate than a term loan, is considerably less costly than your credit card’s interest rate.
Don’t Forget to Cover Operating Costs
Even though your new commercial space is undergoing a build out, you still need to cover your operating costs – insurance, internet, utilities, etc. In most cases, this means in addition to your contingency funds and your line of credit, you will need sufficient working capital to cover these expenses for a minimum of two months longer than the project timeline. Planning thusly means you will be covered for these expenses should your project’s timeline be extended. This temporary working capital will get you through the build out process and is different from your permanent capital which you use to run your business. The fact is, you need the working capital to cover your operating expenses during the build out regardless of whether your project stays on schedule or goes over the timeline you set. They can also help should your opening date at the new location be delayed for any other reason.
Preparation and Planning Keeps Costs Down During Your Build Out
A professional build out team, like the one at Perillo Construction can help you manage your build out successfully with meticulous planning on the front end of your project. Perillo Construction has the experience, knowledge, and expertise to get your project completed on time and within your budget using only the highest quality materials, every time.