Budget Planning Framework For Steel Building Projects: Cost Allocation and Financial Control

When planning the construction of prefabricated steel buildings the issue of budgeting is straightforward because the construction process is relatively simple. That is one of the beauties of this method, but it is important to be realistic.

Yes, with a bit of luck and a following wind you could be looking forward to a seamless project, but nothing is guaranteed, and that goes right down to the location and the price of the raw material.

The Significance of Geographical Location

Your choice of site is something that may or may not be ideal from a cost perspective, but if you have a choice between a convenient one and an inconvenient one from a construction point of view, it needs to be weighed against the importance of location as regards the purpose of the building.

If your steel structure company is going to be bringing in materials by sea and your site is a long way from the port, it will be helpful if the road links are good.

The choice of site needs to be thought through well in advance, then, and it can be a matter of biting the bullet: if the profitability of the business depends crucially on location, you will have to build unwanted transport costs into your budget, but if you have a certain amount of flexibility, then choose the easier option.

In addition to the convenience of the site there are issues such as the condition of the terrain you’re going to be building on, as well as local regulations which may seem unnecessarily stringent but must be adhered to.

Talking to the appropriate authorities well in advance can expose potential problems before it is too late and it may be possible to come up with a work-around with official approval.

You can talk to the local authorities about other aspects of the project, too, including salary levels in the area and the availability of the right caliber of workers. Involving them in the process and demonstrating that you value their opinion can turn an obstacle into an open door.

Nail Down Your Steel Price

This is easier said than done, but the absolute fundamental of your project is going to be what you use most of. By definition, prefabricated steel buildings involve a lot of steel, and the price of that essential material has fluctuated wildly in the last 20 years. Given this volatility, there is even a case for timing your project to coincide with favorable prices, but most projects are driven by other forces and developers don’t have the luxury of waiting.

All the same, it pays to keep an eye on the supply chain from extraction of the raw material through manufacturing right up to delivery. Buying up a large quantity of steel is an investment and should be approached as such, so study the markets and build up a picture of how things are likely to play out.

If you can find a steel structure company that can give you a clear idea of this, then they have done that work for you, so if you’re being offered a particularly good deal, grab it while you can.

The issue of steel quality is a divisive one, with some developers unwilling to compromise their original choice of the best materials they can find. While this is an admirable stance in a way, it can scupper the entire project if you are not prepared to use the only variable available to you: the material quality.

If you can create a budget and make it work with the very best steel, that is all well and good. But in many cases, it is possible to build a superb structure with steel that is a rung or two lower in price.

Labor Costs, Design Complexity and What You Can Do About Them

While the basic contribution of labor to the project might not be too demanding for the local workforce, the figures can rise dramatically depending on the complexity of the design. That presents another choice: simplify your design or accept that it’s going to cost more than you would like to bring in the caliber of people you need.

If the complexity is mainly a matter of aesthetics, it may be possible to achieve a similar result by choosing different textures and finishes. If there are load-bearing implications and other serious considerations, there is less room for maneuver in the budget, but it may be worth getting your architect to have another look at the project and find a simpler way of doing it. An extra entry on the architect’s invoice can be offset by a larger saving on the overall project.

As with choice of materials, then, the sensible option is to be open to rethinking the design if the original budget just doesn’t work.

How About a Professional Estimator?

Anyone who has never commissioned or constructed a prefabricated steel building will find themselves in unfamiliar territory and possibly seeing problems where there are none or missing good opportunities because they don’t know they exist.

A professional estimator will come at a price, of course, but just as using a good accountant can save you more money in tax than they charge for doing it, you could find you come out ahead in the long run.

The Takeaways

Planning is of the utmost importance, but so is flexibility if the project looks like turning into a monster you can’t control. So, keep a close eye on all aspects of the project, take professional advice and be prepared to adapt if necessary.

In an ideal world you would build exactly what you wanted to the specifications you wanted in exactly the place you wanted it. It may still turn out that way, but if it doesn’t, you can still have a wonderful prefabricated steel building if you use a steel structure company that knows what it’s doing.

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