The construction budget is the process of calculating the cost of completing a specific building project. This process is carried out by calculators, which may be employed by general construction companies or by subcontractor firms. Budgets are usually made as part of the bidding process, where each contractor sends their budget to the owner in hopes of winning the project.
- Review the plans, specifications and all project information. Examine each page of the plans carefully to understand exactly what tasks are involved in the project. Look for any special materials or facilities that can be added to the cost of the job.
- Create an offer sheet that outlines all the tasks that will be carried out during the project. For example, a small renovation may include such tasks as painting, demolishing, carpentry, and laying floors. Larger jobs can include hundreds of different tasks. Many calculators use the CSI Master Format system as a guide when developing an offer sheet. This system will minimize your chances of forgetting certain tasks.
- Decide if you will need the prices of subcontractors. Examine your offer sheet to see what tasks your company will perform and which ones will be hired. Sends plans to subcontractors asking for prices for these tasks. Give them enough time to prepare their bids or budgets.
- Calculate the amount and cost of materials required for each task. For example, measure the total number of square feet of gypsum boards shown in the blueprints and multiply this figure by the average cost per square foot in your area. Repeat this process for each task on your offer sheet. To get average cost data to help you with your budget, please refer to the RS Building Data Costing book in the Resources section of this article.
- Determine the installation and labor costs for each task on your offer sheet. For gypsum boards, you will multiply the total of square feet by your average cost of labor per square foot. Calculate this cost by dividing your installers’ hourly wage by the number of square feet they can install per hour. If each installs an average of 100 square feet and charges $ 10 per hour, the installation cost equals 10/100 or $ 0.10 per square foot (0.10 square meters).
- Add all your costs to reach your final budget. It includes the labor, materials and the price of the subcontractor. If there is any additional cost that you have not included, be sure to add it as well. This can include things like permissions, tools, equipment rental, supervision or overhead. Once you have reached your final budget, add a percentage to cover benefits.
Tips & Warnings
- Often, you can find updated construction cost guides in the referral section of your local library.