Mistake #5: Setting Unrealistic Budgets and Timelines

There is a saying in construction; it always takes longer and costs more than expected. Why? Because there are so many variables beyond our control. From supply chain and shippers, to sub-contractors, inspectors, city codes, and the weather just to name a few. It is impossible to forecast them all.

So how do you, on the outside looking into the unfamiliar world of construction, understand and set realistic budgets and timelines?

It starts with identifying a team of trusted advisors. Your list should include:

• People you know who have been through the commercial construction process before. These connections can give you a general understanding of what the process is like. These friends or colleagues can share what they have learned.  Their experiences can give you wisdom to avoid mistakes as well as implement the things that worked well. The referrals offered by people you know provide a great starting point when looking for the appropriate resources. 

• Commercial Realtors who understand commercial markets and have their own team of trusted advisors. Not only are commercial real estate agents essential in finding a commercial space, they are also experienced in negotiating the best market prices.  Real estate agents typically work with client’s long term and are familiar with their unique commercial build-out requirements. They can be an excellent resource when assembling your construction team.

• Financial Advisors and lenders who can help with understanding the financial options. Options like SBA loans and lines of credit offer different pros and cons. If you need additional funding to invest in your commercial construction project, these experts can help you navigate the loan options to find the one that provides the resources and terms you need to complete your project. Many of these advisors can set up a progress payment structure that also protects you from a contractor who may not be meeting quality standards or promised time tables.

• A consultative general contractor will help you plan and then deliver the optimal space to support your success. Finding a local general contractor who will meet with you early in the conceptual planning stage, will save you a lot of time and money in the long run. A commercial GC should understands how long the permitting process will take from city to city. They have experienced many of the problems that can arise when building out a shell space or remodeling an existing location and should be able to help you look around corners to avoid those problems.  If money or time is tight, the right GC can help guide you in how to save time and money up front by understanding your priorities and helping you plan your project accordingly. 

Finally, the construction saying above notwithstanding, with the right team in place, commercial construction doesn’t necessarily have to take longer or cost more than expected.  By seeking out wise experts in advance, making allowances for the unexpected in your plans, and identifying and planning for points of risk with your GC, you can move forward with your commercial construction project with confidence. 

Use these tips to avoid mistake #5 by setting a realistic construction timeline and budget.

Check out all 5 of the 5-part series; 5 Mistake to Avoid when Buying or Leasing.