Which one do you need and how are they different?
You’ve come to the conclusion that you cannot wait any longer and your vision to expand your business has now become a reality. It’s time to set up a meeting with a contractor so you can get an idea of what your project might cost. What can you expect, what should you be looking for, and how do you begin?
A budget is a rough estimate of the costs of construction which can be prepared without a lot of detailed project information. In the initial stages of a project an owner is often looking for a “ballpark” figure to determine whether the project they have in mind is feasible often before they talk with a bank or apply for financing. Budgets can be very general or include a fairly close estimate depending upon the details the owner has available at this stage. Here are some questions that will help a contractor develop an initial budget:
- What is the square foot size of the project?
- Will it include new construction, renovation, expansion, or a combination?
- What will the building be used for?
- What does the proposed site look like?
- What spaces will be included (production, offices, restrooms, and other specific uses)?
It’s important to know that a budget is simply an educated estimate which provides a starting point for developing the real project plans and can help determine the feasibility of proceeding with the proposed project.
A bid is a pricing document based upon tight specifications and a complete set of construction documents including building plans. The bid is received by an owner once the work is clearly defined and a decision has been made to move forward with the project. The bid includes realistic costs and schedules from a general contractor and all necessary sub-contractors proposed for the project. A bid takes time and effort to develop and will specify most details about the building project. An accepted bid moves your project to the construction phase.
It’s an exciting time when your business is growing and expanding. If you’re new to the process, you will want to start with a budget. Working with a quality general contractor from the beginning can help provide insights on saving time and money, getting the best value, and helping deliver a project you can be proud of.
Between a Budget and a Bid
Once a budget is determined to be feasible, most owners will then begin the steps necessary to obtain financing and begin development of more detailed plans. This can begin by either:
- Negotiating a more detailed budget with a general contractor (GC) and kicking off the project as a design-build arrangement.
- Hiring an architect to design the details of the project and provide a complete set of construction documents for the bid process.