Setting the budget for your construction project

Creating a budget for your construction project is one of the most important steps you can take to ensure its success. A quantity surveyor may be responsible for informing the budget and working with the design and professional team to come up with a viable scheme that meets the client’s needs. It’s essential to research and accurately estimate the cost of the project in order to avoid any costly surprises down the road.

Here are some key facts to keep in mind when setting the budget for your construction project:

What is a budget and why is it important for construction projects?

A budget is an estimate that states the amount of money that needs to be available for a construction project and how it will be spent. It is important to have a budget in place before starting a construction project because it will be used by your professional team to ensure that the project stays on track and does not go over cost. Several different elements can be included in a budget, such as materials, labour, plant, preliminaries, overhead costs, fees, contingency, etc. Your project manager and cost manager will use the budget to manage how much is being spent on different aspects of the project, how actual costs compare to those predicted and identify potential cost risks at an early stage.

Once the budget is finalised, it is used as a baseline tool to track progress and make sure that all expenses are accounted for. 

How a quantity surveyor helps set the budget for your project accurately and within your constraints?

A quantity surveyor (QS) is a construction professional who specialises in measuring and valuing building work. Quantity surveyors are often employed by developers, architects, and engineers to provide an accurate assessment of the likely costs of a project. They take into account the type of materials to be used, the complexity of the design, the size and location of the site and current day market prices. 

In addition, a QS will also consider potential risks that could increase the cost of the project. By taking all of these factors into account, your QS can provide an accurate estimate of the budget required for your project. This information can then be used to help set realistic financial constraints for your project. Employing a QS at an early stage is key to ensuring that your project budget is realistic, robust and maintained throughout the project lifecycle.

What should be considered when creating a construction project budget?

When creating a budget for a construction project, there are many factors to consider. The cost of acquiring the site, construction, demolition and site clearance are obviously key considerations. However, other costs such as design fees, professional fees and consultancy fees can also quickly add up. Don’t forget to factor in the cost of project finance, insurance and VAT. 

Once the construction is complete, there may also be expenses related to sales and marketing for the completed project either to sell or let the building or units within depending on the nature of the project. 

Finally, it is prudent to include a contingency in any budget to allow for unforeseen circumstances. By taking all of these factors into account, you can create a realistic budget for your construction project.

Key things to remember when setting your construction project budget?

There are a few key things to remember when setting the budget for your construction project. 

• Cost and budget are significant constraints so setting a budget is vital from the outset. This will ensure the developed design is achievable within your budget and that your project aim and objectives can be delivered within your budget.
• A reliable budget needs to be based on quality information. This must take account of economic conditions such as inflation, supply chain and cost of materials. 
• The budget must also be responsive to changes that occur during the lifetime of the project. 
• Contingency must be built into the budget to cover unforeseen events. 
• Once the budget is set it is important to monitor expenditure closely to ensure that the project remains on track.

Why choose a qualified quantity surveyor and RICS practice

When undertaking a construction project, it is important to use a qualified quantity surveyor to provide accurate financial advice about the costs involved. A RICS-registered practice will use industry-standard documentation and cost benchmarking data to produce a detailed estimate of the project costs. 

In addition, they will take into account historical data and local market conditions to ensure that the estimate and subsequent budget are as accurate as possible. 

RICS-registered practices are bound by a code of ethics and professional standards, which helps to ensure that they operate in a fair and transparent manner. Consequently, using a qualified quantity surveyor from a RICS-registered practice is the best way to ensure that your construction project is completed on time and on budget.

Employing a QS is the best way to ensure that your construction project is completed on time and on budget. A RICS-registered quantity surveyor will use industry-standard documentation and cost benchmarking data to produce a detailed estimate of the project costs. Furthermore, they will take into account historical data and local market conditions to ensure that the estimate is as accurate as possible. Consequently, using a qualified quantity surveyor from a RICS-registered practice is the best way to ensure that your construction project is completed on time and on budget.

How Evolution5 can help you

Our award-winning team is experienced in supporting clients across London and the South East in all aspects of cost planning and management. If you’d like to find out more about how we can help you compile a robust and reliable budget in order to ensure your construction project achieves your financial goals, get in touch for a complimentary initial consultation.

Evolution5 is a professional consultancy offering quantity surveying, cost management, project management, principal designer, employer’s agent, construction management and contract administration services for projects across London and the South East.

If you have a construction project and would like to explore how the team can help you, click the button below or call 023 8040 5073.