Whether you are building a brand-new space or renovating an older one, your budget is the most important part of getting started. Without a proper budget, you are likely going to have to make VE cuts (VE=value engineering, which really means you’re over budget and now you have to cut items) so that you don’t end up with a white box that looks more like an office than a resort.
Creating the correct budget takes work and attention to detail. There is a lot of pricing to consider such as: construction costs, design fees, furniture, finishes, window treatments, artwork, accessories, smallware’s, exterior furniture, signage and Low voltage items. Understanding the TOTAL cost of your space is going to help you make the best decisions by being proactive vs having to make them in a crisis situation. You know the ole Benjamin Franklin saying, “If you fail to plan, you are planning to fail.” Wise spending requires excellent financial intel that a holistic budget can provide. This will get you to market faster, keep you on budget without having to make excessive VE cuts or having to go back to your investors and ask for more money.
To help you get started, here are the top 5 mistakes we’ve seen folks make when their budgets don’t match their dream:
Small Costs…Cost More
There is a big difference between budgeting for one room vs. planning for many rooms. When you are budgeting for one room, costs are generally higher than when you build in bulk. Think of it like driving a car. When you drive short distances in the city, you get terrible gas mileage. When you are traveling longer distances on the highway, you get great gas mileage. Small renovations still require the same prep time and stop time, it’s just like starting and stopping when city driving. With a larger space, you get to take advantages of economies of scale so just like highway driving, the price per mile is better when you have farther (bigger) to go. When you hire a painter, you don’t get the same price per room for one room as you would for ten rooms. You have to keep that pricing in mind when budgeting for smaller renovations or your wallet may be in peril.
Not All Spaces Are Created Equal
Location, location, location. Where you are making changes to a design or expanding spaces, the location of the change makes a huge difference. Many contractors will show you an average price per square foot (sq. ft.) when they calculate their total cost. But, per sq. ft., common areas (dining rooms, lounge, lobby, fitness rooms, etc.) cost more than resident rooms which cost more than hallways. Don’t make the mistake of calculating the cost out of an all-inclusive cost per sq. ft. number. For example: If you are averaging $200.00 per sq. ft. for the building overall, this might mean the common area is $300 per sq. ft. the hallways are $175.00, the resident rooms are $200.00, back of house is $125.00 per sq. ft. etc.
The Cost of Deconstruction
Let’s go back into the car and think about construction zones on a highway. When “renovating” the road, there are so many more costs and factors that slow you down than when building a road from scratch. You have to make sure the space is still safe for people to pass through. You can only work at certain times. You have to get rid of what is already there before you can construct what you want to replace it. All of these come with costs that make renovation significantly more expensive than the cost of a new build. Many folks actually budget much less for renovation than a new build building, it makes sense right? They already have lots of the building that they don’t have to pay for again. The issue is that the costs to renovate a “live” environment, especially in memory care, can sometimes make the process way more costly and more time consuming. Proactively plan for the hidden “live” costs so you don’t run out of fuel while you’re stuck in construction traffic.
Remember to plug in!
We’ve seen a lot of budgets and one thing that everyone forgets to put into their budget is the technology. This includes things like the wiring for internet, phone lines, smart devices, pharmacy, bidets, tracking devices, EMR’s, security technology, etc. It’s a nightmare to think about after you’ve built a space. These are essential items that should be integrated from day one. Technology is no longer a nice too have… it has become a need to have. Budgeting for a building without the technology is like planning a building without indoor plumbing! You can get by with an outhouse, but it’s the twenty first century, and no one wants to live like that if they don’t have to.
This Is Not HGTV
Unfortunately, you don’t get to build a space and then hope to have the budget to fill the spaces with furniture, finishes, window treatments, artwork and accessories. The best way to know you have the budget you need is to involve an interior designer from the beginning. Interior designers understand all that goes into a space from the furniture to the artwork no matter the size of the project. Without one, you are liable to create a construction budget for a beautiful but empty room! It would be like buying a car and then finding out the seats were not included. We live in the space after all — eating, connecting, and sleeping, which all require furniture.
How Do I Avoid These Mistakes?
We are glad you asked! Mosaic can help you make a budget that encompasses all of these costs no matter the size of the space. Our Feasibility Studies use our in-house algorithm to take your vision and turn those plans into a budget that can help you understand the cost of what you want. Want something with more detail, get a Cornerstone Assessment which breaks down your budget by each item you are going to want in your space. With a better budget, you can stop worrying about what you missed and what might sneak up on you, and instead, move forward with confidence knowing what you need to realize your vision.
At Mosaic, we take the guess work out of your space. With our services, you’ll know what the actual cost looks like so you can plan with confidence. We provide you with the wisdom to make the best decisions, whether it’s going to your investors or saving up your own capital, you can trust Mosaic to help you plan for the space you are imagining so you can make it a reality.