Considering Budgets Pre-Project

Consider Budgets Pre-Project

copyright Anders Adermark

Our concern at Sterling Building Materials is that your project comes in at or under budget. We want to keep you as a valued customer, so we are only successful when you are completely satisfied.

With that in mind, here is an article that we want to reprint. Much of this is common knowledge, but it never hurts to revisit basic budgeting principles again. Thanks to Emily Beach of for these thoughts.

When it comes to preparing a construction budget, items such as building materials and installation costs are fairly easy to determine. These numbers are mostly taken from subcontractor’s bids, making the working portion of the budget relatively straightforward. The costs that are often overlooked are those relating to the construction site itself, as well as management, labor, and facilities. These costs are known as “General Conditions,” and include any expenses incurred on the job that are not directly related to building or purchasing materials.

Management costs

This includes the salary and labor burden of the project manager, project administrators, superintendent and assistants. Multiply the hourly salary of each of these individuals by the number of hours he or she will work on the project each week. Use your project schedule to determine how many weeks the project is expected to continue, and multiply this by the total weekly salaries to find total management expense.

Other labor costs

While most work on the project will be performed by subcontractors, the general contractor may also have some employees on the site. These individuals may be responsible for safety installations, covering scope gaps (like door installation and basic carpentry), or helping with cleanup and material storage. Multiply the weekly salary of these individuals by the length of the project to determine labor costs.

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