Have you ever planned a family vacation, only to realize midway through that your credit card bill will go through the roof this month? Have you ever bought a pre-owned car, only to realize that it needs so much maintenance and so many replacement parts, you would’ve been better off getting a new one?
It happens. You plan, you save, the unexpected comes up. And while it doesn’t take a genius to figure out that something similar could happen in construction, how do you know how much you should be setting a side as part of a contingency budget? And if you plan everything well, do you really need one?
How much to set aside?
The amount that you should set aside for it will depend on the type of project and the likelihood of foreseeable risks occurring. The higher the risk, the higher the budget. There are several things you can do to avoid risks: Have great insurance. Have a business attorney review your contracts (for example, you want to have indemnification clauses in there in case someone sues you because of something a subcontractor or someone else did). Comply with codes and regulations, so that a cinder block is not falling on someone’s head.
All this said, regardless of how careful you are, there will still be things that pop up unexpectedly, and if you have money set aside to deal with it, you project will move along smoothly.
If I plan things well, do I really need one?
Ok. Let’s say you planned everything down to the last brick you’ll need. You hired a reputable construction company, have a stellar project manager, and even an Owner’s Representative. How could anything go wrong, right? Then you get a hurricane watch, that not only delays your project, but when it actually hits your town, it damages portions of what has already been completed. Did you plan for that? What if everything gets flooded after one of the many typical thunderstorms we get during the summer in Tampa? What if you have several injured workers and your Worker Comp’s insurance rates go up? I could continue adding items to the list of things that are hard to plan for, but you get the picture.
The best way to plan for the known and for a list of potential variables is to hire an experienced construction company that has been around the block long enough to know how to deal with unexpected plot twists.
Eclipse Building Corp. can help you plan your construction or renovation with realistic expectations. We can also deal with all of the pre-construction issues such as planning and permitting, and post construction aspects, such as maintenance and warranties. Give us a call and let’s talk about your project. We will get you from A to Z beautifully, and on budget.