Why early cost analysis is so important
In any project, aspirations and budget can often be miles apart and the reality generally sits somewhere in between. To ensure smooth progress, it is vital to get to that reality sooner rather than later and that means analysis of the project cost at the earliest possible opportunity.
In reality, this means that once the brief has been explored and the initial sketch designs have been produced, it is time to get that first cost health check. This generally takes the form of a budget cost exercise, carried out by a Quantity Surveyor (QS), which is a short report which gives an indication of the overall likely construction cost, based on the sketch designs. In our experience, when we have tested this figure against actual market rates, ie. gone out to tender, a good QS’s budget cost will be within 5% of the tender figure.
What a budget cost will do is give you the opportunity to determine the viability of your project at an early stage. If it highlights that cost savings are required to the overall figure then the budget cost, which will be broken down into all the varying elements that make up a building project, can be used to determine where cost saving opportunities are likely to be. If it all appears on budget, then it gives you peace of mind to carry on to the next stages safe in the knowledge there will be no nasty surprises down the line.
The other advantage to clients of this approach is that the architect’s role is limited up to the point of the budget cost exercise, meaning that design fees are minimised until such time as the financial viability of the project is established. We have all heard of projects where it hasn’t been until the tender stage that the true costs have been revealed, and, whilst they may reflect a design which meet the client’s aspirations, far exceed their budget. This leaves the client out of pocket in terms of the additional design fees they have paid to get to this stage (ie Planning and Building Warrant) for a scheme they can’t afford, and generally sends the architect back to the drawing board, incurring additional costs of his/her own. Not to mention stalling the project timeline, as sometimes it can mean returning to a new planning application.
We do everything we can to avoid this scenario as we are aware of how important momentum is on a building project, and that this stems from establishing cost certainty at the project's embryonic stage.