Digging Deep Into Conceptual Budgeting: Foreseeable and Unforeseeable Costs in Cost Estimation
Pre-construction estimates are some of the first deliverables given to construction clients. From framing a budget to predicting hard and soft costs, conceptual budgeting sets the tone for the overall build. While many clients are eager to begin a new project, it’s important to first analyze location, environmental hazards, and the unforeseeable costs of a construction build.
Cost estimation is both an art and a science, requiring a seasoned estimator who knows the ins and outs of the construction process, as well as, the intricate costs of unforeseeable hazards that can wreak havoc on a construction build.
For this reason, it is essential to find an experienced professional who can account for both foreseeable and unforeseeable costs in a conceptual budget.
Calculating Foreseeable Factors in Cost Estimation
In any construction project, the contractor must take into account the location of the project. Is it easy to get to and work on, or does it take special equipment and preparation before the actual construction can begin? Projects where the land isn’t conducive for building certain structures without adequate reinforcement takes both time and money to accomplish. Projects in urban environments need to take into account how a building will fit in with the local infrastructure. Also, the cost of doing business in some cities can be higher than in others, due to permits, taxes and expenses.
Location factors in cost estimation are easy to foresee in any conceptual budget. A diligent estimator with knowledge of the construction process will be able to appropriately account for them up front.
Unforeseeable Factors in Cost Estimation
Unforeseeable factors, however, take an experienced estimator with a bit of talent to prepare, measure and adjust for them throughout the construction cycle. Unexpected costs can implode a budget if not appropriately accounted for during a project’s development. An estimator must know how to build-in some of these costs up front, and then actively watch for unforeseen circumstances to occur so they can quickly move resources to maintain a balanced budget.
Hazards as a Factor in Conceptual Budgeting
Unforeseeable costs can also include hazard insurance, bonding, and workmen’s compensation. Hazards can also be tied to terrain, surrounding structures, and other situational hazards, whether natural or manmade. The cost of workers’ time off from work due to accidents and injuries on the job need to be accounted for in the budget, as well as the potential cost of hospitalization and health care. While these hazards often times never occur, it is vastly important to account for any accident or problem that may occur.
The Importance of a Seasoned Professional
Because of the intricate details of creating an actionable pre-construction budget, it is hugely important to hire the right professional for the job. South Bay Construction has been working in cost estimation in the Bay Area for almost four decades. At South Bay Construction we have extensive knowledge in cost estimation hazards, on sight workmanship and an ability to deliver projects on time and ahead of budget.
From project pre-planning to the grand opening, South Bay Construction has been there every step of the process. Thanks to the countless hours of creating diligent and effective cost estimation plans for the past 38 years, South Bay Construction was able to create the Cost Reference Guide—a mobile and printed guide for cost estimation projects.
FREE Cost Reference Guide
With the South Bay Construction Cost Reference Guide, you will get access to the most up-to-date construction pricing and market data. The updated pricing reflects the current Bay Area market conditions for most projects — from building shells to tenant improvements — making it a critical budgeting tool.
To download the FREE Cost Reference Guide, click on the button below.