John Jordan Advises How to Determine an Accurate Project Budget
One of the most challenging elements of pre-construction and budgeting is working with minimal information to develop an early-stage budget that comes close to the final contract number without eroding the established profit margin goal. Our client partners come to us with a scope description, limited drawings, and possibly specifications, to assist in developing the budgets required from their client owners. Keeping the end user and architects design ideas, expectations, and concerns at the forefront of the budget process is critical.
While general contractors often have an idea on cost, they need us to use our knowledge of similar projects to produce a price that validates the budget and identifies items that may cause budget issues as the project documents are developed. To be exact would be nearly impossible but we know we must be within a tolerable margin over/under the final value to best serve the needs of our clients. To combat these obstacles our team has many tools in the toolbox:
- Drawing from personal and team experience
- Historical estimating data
- Evaluation of market trends to avoid misses in material and labor escalation costs
Our team has done a fantastic job of documenting previous project estimates and pulled important information into an easily digestible spreadsheet to help our customers feel confident in our pricing. Utilizing an experienced group of people that have been in the AZ construction market for many years, K2 is able to help our clients reach their end goal of a successful project that balances the design team’s intent with the owner’s budget constraints. Building confidence in our clients with persistent effort, reliable communication, and accountability is the key to creating a genuine working relationship.