5 Steps to Stay on A Renovation Budget
When I start to work with clients, the dreaded renovation budget question comes up. I say it’s the dreaded question because most people really don’t know what things cost to renovate. There are some that also don’t want to be honest with the budget for fear that the entire budget will be spent. So how to you formulate a renovation budget and stay on it? Here is the process I work through.
Renovation Budget Step 1
Have a Design Plan
It’s hard to create a budget when you have no idea what the space is going to look like. Having a design plan allows you to see your space and include all the items that you wish to have. When you have this plan, then a budget can start to be pulled together. This also gives me the opportunity to educate my clients on what I believe my estimate will be on the cost to carry out this plan. While some clients initially may have unrealistic expectations (champagne taste on a beer budget), I believe it is my job to educate and inform my clients. It’s not my job to lie to my clients and tell them they can have it all. If they can’t have it all (whether it’s due to budget or space), I’m honest. What I can do however, is formulate a design that will work! One that will be functional first, and then ensuring that function is going to be pretty.
Renovation Budget Step 2
Create a Budget for Product
Once I have a plan in place and my clients have given me the go ahead and love the design, I take that plan and start a budget for the items needed for the renovation. Have you noticed I’m not working into the budget any labour (yet). I take every item in the plan and start sourcing. When I’m sourcing items, I am not ‘estimating’. I am using real costs for the items. Why do I do that? Because most every item that is sourced can be changed. It can be changed to a more expensive item or it can be exchanged for a less expensive version. This is where the ‘budget’ for the products can be massaged and tweaked. I also include my Designer Discount that I share with my clients so they can see that there are some great savings that can be had when working with a designer!
Renovation Budget Step 3
Create a Budget for Labour
Once a budget is created for the product, then general contractors can be called in to quote on getting the work done. Most clients wish to get at least 2 quotes if they already don’t have someone in mind to do the work. Once the quote for the labour is submitted, then an overall budget can be put together.
Renovation Budget Step 4
Putting it all Together
While product can be tweaked and massaged, labour can not. The price to carry out the work is the price to carry out the work. If the overall budget is higher than expected, my clients and I go back my sourcing list and see where we can cut back. We may need to make some tweaks to the design plan, I may look at sourcing different product or my clients may choose to go ahead with the plan as is. When all of those decisions are done, I come up with the final budget. The budget then is finalized and agreed upon.
Renovation Budget Step 5
Transparency & Communication
Part of having a successful renovation, in my mind, is keeping my clients updated with progress. Progress with the actual build as well as progress with product. How do I do that? I use a system that I recently created called Stop Lights. I use green, yellow and red to show where we are with budget. For example, if I specified a $250 light for a space and I happened to score that light for $200, then I give that item a yellow (symbolizing CAUTION: LOWER PRICE FOUND). If I specified a $250 light and I got that for $250 then it’s green (symbolizing we are right on track). Finally, if I specified a light for $250 and my clients really wanted a different light for $300, then that item gets red for being over budget (symbolizing STOP - over budget item). What this colour coding does is provide a very quick visual with what was under budget, on budget and over budget. Once decisions are made to procure any items, I send an update with the purchases (along with a Purchase Order). I find this is a great way to ensure there are no surprises and that my clients are well aware of how the budget is coming along. It’s extremely easy for a budget to expand if you are not keeping track.
As you can see, there's a lot of pre-work involved in getting a renovation planned and ready. I hope this gives an insight to what is all involved when you work with me.
Looking to get help with your upcoming renovation? Contact me to discuss your project!
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