Keep your construction and/or renovation project together, and manage your budget tightly by using our Sephaku Cement: Starter Planner Pack. In this post, we cover the value of detailed project plans and budgets. Being thorough from the start cannot be underestimated.
An accurate projection of your project requirements and the cost needed to deliver, line item by line item, is important to keep your project tightly on the rails and on forecast.
Our team of cement/concrete and project management specialists has created a template from which you can adapt and scale your project line items up or down, based on your building needs and site requirements. We hope that you find this framework a handy extra tool in your DIY toolkit.
Download the Sephaku Cement Project and Budget Planner template here >
To add to the customisable build planner download, we have taken this opportunity to share some points to keep in mind when you are in the preparation phase of your build plan.
Why is it crucial to get your budget right?
Website designingbuildings.co.uk [1] defines a budget for a construction project as being the factor that helps to “determine what is affordable”, and states that this “should be set as early as possible” and that it is important for you to ensure you work with a realistic budget.
Assessment of an accurate cost estimate cannot be underrated in this type of project scale, even if it is a home-based DIY project. The Designing Buildings online resource goes on to say that the “project budget can be established by the analysis of pre-design requirements, initial design solutions, comparative projects, and funds availability.
Projectmanager.com says that project costs can be classified into one of three categories, namely direct cost, general conditions, and profit and overheads. In this site’s Budget Quick Guide article, it is explained that “direct costs include heavy equipment, construction materials, and labour—all the costs that can be directly attributed to the production of the physical product on site.[2]”
General conditions cover more indirect costs such as those in the preconstruction phase, project operation and construction organisation fees. The category of profit and overhead is for those who are professional contractors.
More specific cost centres could include: land or property acquisition, legal and/or property approval fees including site investigations, planning costs, financing costs, construction (direct and general) costs, project insurance requirements, inflation, any consultant fees, and on completion of the construction, any relocation related costs.
A contingency budget line item is estimated upfront with this tending to be between 3% to 10% of the total project budget. Sight must not be lost of eventualities and/or changes to cost due to external factors not known at the time of planning/budget of your project. It might be good to build in an additional contingency buffer for these unfortunate realities which could be different ground conditions that need extra care or a different approach.
In South Africa, VAT @ 15% should be factored into the budget calculations.
The Sephaku Cement team finds the sample budget framework (see Table 1) put forward by Carnegie Mellon University (CMU) [3] a good example of the detail needed in the line items within this type of budget. As the education institution says:
“In addition to cost amounts, information on material quantities and labour inputs within each job account is also typically retained in the project budget. With this information, actual materials usage and labour employed can be compared to the expected requirements. As a result, cost overruns or savings on particular items can be identified as due to changes in unit prices, labour productivity or in the amount of material consumed.”
TABLE 1 Illustrative Set of Project Cost Accounts