When new commercial real estate projects are initiated, one critical element often gets overlooked: establishing a clear budget. It is often the case that these projects exceed the expected overall cost or experience delays due to the lack of budgeting at the onset.
Why a Budget Matters
Unanswered Questions: It’s surprising how often we ask, “What is the budget for your project?” and receive no definitive answer. While it may seem like just another formality, this question holds the key to a more efficient and successful project execution. Establishing budget that includes every procurement required to complete the project successfully, within the first few weeks of project initiation, sets the foundation for a predictable project.
Focused Procurement: In the instances where a budget is established, the budget becomes an invaluable tool for procurement. With a clear budget, vendors can immediately hone in on the products and services that fit within the pre-determined financial parameters that are also aligned with the established requirements. A clear budget ensures that every option presented is viable thus saving time, reducing back-and-forth, and keeping the project on schedule.
Efficiency Equals Savings: The true value of having a budget in place is that it creates “a shorter path from here to done.” When everyone involved knows the financial boundaries, decisions are made faster, timelines are reduced, and the overall project duration is shortened. By shortening the project duration, you also reduce costs. In essence, having a budget mitigates against the risk of cost overruns due to project delays.
As you consider your next commercial real estate project, we encourage you to prioritize setting a budget from the start. It’s not only about managing expenses; it’s about experiencing a shorter project duration, realizing the vision of the project, and being satisfied with the overall project cost.
When you decide you need to establish a project budget reach out to us!