One of the first things we accomplish when we take on a new client is to nail down just how much the church can afford. Understanding Affordability is the Critical Success Factor in any church construction project. One of the biggest communication miss-steps is when the church says they have $3,000,000 to spend and then they begin to design a $3,000,000 building.
DOWNLOAD THIS FIRST New Construction Sample Budget
Today I’m going to walk you through 3 budgets you need to be concerned with during construction
- Construction Budget – Just like it sounds the construction budget is everything involved in the physical construction of the building. That sounds simple and it can be. If you’ve ever heard the phrase “good fences make good neighbors” you get the sense of how important it is to determine exactly what the builder is planning to be responsible for. Because if they aren’t responsible for it guess what….you are. You need to ask a million questions and make sure that both you, and the builder understand who is responsible for what items. When they reply, if you have gaps in your understanding, ask another question. (For more on this technique talk to a 7 year old girl and try to explain to her why she can watch Hanna Montana like everyone else, when she starts asking questions you’ll get a good feel for how you should be with your builder)
CLARITY = GREAT RELATIONSHIP
- Soft Cost Budget – The Soft Cost Budget is everything related to the project that isn’t covered under the Construction Budget. Things Audio, Visual, Lighting, Furniture, Fixtures, and Equipment. Permits, preparing the site may or may not be covered in the construction cost. You can see from the included picture that there are quite a few items that fall into this category. Usually between 25% and 40% of the cost is related to the Soft Cost Budget. That means in a $3,000,000 budget $750,000 to $1,200,000 will be Soft Costs.
Can you see why it’s important to make sure you let the budget drive the project?
- Total Construction Budget – When a church tells me they have $3,000,000 for construction, this is usually the number they’re talking about. Most churches think in “soup to nuts” terms when it comes to money. Like I wrote at the top, it is incredibly important to determine just what the Total Construction Budget is as early in the process as possible so it can be used to make every decision that adds or takes away cost from the project.
I like to manage these three budgets as independent parts of the whole. When a church decides to add $50,000 to their audio budget I want them to have to make a decision about where it comes from in another part of the budget. Does it come out of the furniture budget or are we giving up square footage for it? This is exactly how we manage our personal budgets right? We don’t spend money and then go and ask to have our budget increased. We try to get as much as we can for what we have.
If you have any questions about putting your budget together shoot me an email at rwchancy@cogun.com. I’d love to help!
