Estimating construction budget is never easy. Budgeting construction for a business is especially difficult, as there are even more variables in play. The type of commercial building makes an enormous difference—whether a shopping mall, an amusement park, a restaurant or a factory, these will all have unique requirements and costs.

Fortunately, there are a few rules that can get you started in crafting building a budget for whatever you plan to build.

Building Quality

Class A

Class A buildings have the highest quality. Their appearance is pleasing to the eye, and they have the most (and the best) amenities. Class A buildings are also the most expensive to build, and are typically found in the high-rent areas of a city. Skyscrapers and high rises are Class A buildings.

Class B

Class B commercial buildings are considered an aesthetic “average.” Their architecture and fixtures are less impressive than Class A, but they do still house amenities. They are usually under 5 stories. Costs for these types of buildings are moderate.

Class C

Class C buildings have the bare minimum of amenities and less modern fixtures. They cost significantly less than B or A-class buildings, and are usually found in the lower-rent parts of a city. Low-income apartments are an example of Class C constructions.

Architecture

Naturally, the more complex a building’s architecture, the more it will cost to build. Many architects are considered engineering artists, but no good art tends to come cheap. Architectural design for a commercial structure includes not only the design elements (like window shape) and technological amenities, but also the building basics, like the number of stories a building has, as well as floor and wall space. A one-story storage building can range from $25-40 for a square foot, while a 2-story building can get up to $70 or more.

The more complex a building’s construction, the more it costs per square foot. Consider what level of complexity you need or want when having a building designed and built.

Labor

Labor varies by a huge margin based on the metro or area you build in, the weather, and the skill-level of that labor. Low-skilled workers are the cheapest, of course, but if you have a complicated construction plan or want to ensure finishing your project on time and in budget, cheap labor is not the best choice.

Working in bad or extreme weather conditions will also require more pay. Laborers may need hazard pay, or simply demand more for working in adverse weather conditions. Location plays a big role in determining how much workers are paid. And lots outside of packed urban centers are often cheaper to build on, because the labor there is less expensive and machines are free to move to site more easily.

Good labor will include some training for workers, too, as well as staffed fire stations and people on-hand for emergency protocol.

Materials

A business owner who plans to build a new building must consider the following costs relating to materials:

  1. How much do the materials cost in the first place?
  2. What will the costs be for getting materials to the building location? Bulk materials may be cheap, but shipping gigantic quantities of them usually isn’t.
  3. If the building parts are coming across international or state lines, there may be some added costs.
  4. Bulk materials are cheaper, finished goods are pricier, and custom pieces are downright expensive in some cases. If you know what you want, however, the benefit to these higher-quality fixtures, materials and finishes will be plain to see.
  5. How much do you need? A bigger building requires more of just about everything. A complicated and more ornate or elaborate building will need more specialized materials, too, such as certain cuts of glass, stone, etc.

Mechanical an Electrical Systems

Air conditioners, internet, lights, electrical wiring, disabled access, and much more need to be part of the building plan, too. Business owners should be aware of the mechanical systems required, their set-up, the laws concerning electrical systems in commercial buildings, and (of course) their costs.

Commercial buildings run a full spectrum when it comes to electrical and mechanical requirements. For example, an IT server room focuses on power, internet, and cooling, while an office or apartment will have a much broader range of requirements.

Finally, the building must be up to state and federal code when it comes to electrical systems.

Licenses and Permits

Licensing requirements for building varies greatly according to the type of project and its location. Different locations have different rules and regulations, so check the local laws regarding permits, fees, and fee schedules.

To verify that a Texas contractor is licensed, look here.

Location

Location is possibly the most important factor. It determines so much about your construction, for instance:

  1. The cost of the land. People live in the suburbs because it’s cheaper than the city. The same goes for many businesses.
  2. Permits and licensing. The costs of doing everything with the right permits will differ from location to location.
  3. Shipping/delivery of materials. It may be cheaper for licensing and labor in a rural area, but shipping construction materials to that area can sometimes be cost-prohibitive.
  4. It’s easier to build somewhere not prone to hurricanes and tornadoes.

Quick Commercial Construction Project Cost Estimate Guide

I. Cost per Square foot

Multiply the building’s total square footage by the cost. Multiply that by the area of each floor. Your construction contractor should be able to help you with this, as this number includes labor costs.

II. Materials purchasing and shipping

How much does it cost to buy all your materials and get them to your building site?

II. Add Fees

Add the costs of installing the mechanical systems, electrical systems, and permit fees.

Calculate a ballpark figure

I plus II plus III should give you a basic idea of your costs.
Here is a detailed breakdown of construction project budgeting with a template you can follow.

Other Costs

There can always be unexpected costs— emergencies, accidents, flooding or weather. In fact, the only thing you can expect is that these unexpected costs will come up. For this and other reasons, it’s never easy or straightforward to calculate building costs. These problems can require additional construction and materials purchase, and incur higher labor costs.

Looking for help?

If estimating your commercial construction costs has left you overwhelmed, get someone reliable. It pays to get construction and paving contractors who know what they are doing. Reliable Commercial is the professional experienced construction contractor who know how to get you an accurate estimate. Contact us today to get the conversation started.

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