Office Refurbishment Costs
9 in 10 construction projects go over budget - and 5 of those by more than 10%. Unfortunately, office refurbishments are no different. If you've been involved in an office refurbishment before, there's a good chance it finished significantly over budget. This is very damaging for you as a company. It not only requires the reallocation of funds, it also often leads to internal conflict.
Regardless of whether you're planning your first, fifth, or fifteenth office refurbishment, you're likely wary about cost overruns. We've completed hundreds of office refurbishments since 2008, so we're familiar with the causes and consequences of renovations that go over budget.
That's why, in this article, we'll explain the top 6 hidden office refurbishment costs. By the end of this article, you'll know how to identify and avoid these hidden costs, helping you get your project completed on time, on brief, and on budget.
Variations
For most companies, a big unexpected cost is variations. These occur when you want to add or adapt something after the contract is signed. Your design & build partner will usually be happy to issue a variation to the contract - at an extra cost. Common causes for variations include scope additions or wanting to upgrade the specifications. Variations occur in every project. Office refurbishments are complex projects, so it is almost certain you will have forgotten something or will want to upgrade something during the project.
To ensure variations don’t send your project over budget, you need to do 2 things. First, carefully review your quote and design package before you sign the contract, to ensure it meets the brief and nothing is forgotten. Second, allow a contingency of 5-10%. This will enable you to make changes as needed without going over budget.
Time
It may not be a monetary expense, but one of the most damaging hidden costs of refurbishing your office is the sheer amount of your time that it takes. At Zentura we advise our clients to allow 10-15 hours per week for a 10,000 sq/ft project. For larger projects over 20,000 sq/ft, you will need to allow at least 20 hours per week. For particularly busy phases such as pre-start and delivery, this may double.
You can reduce the amount of time you and your team need to spend on your office fit out by appointing a design and build partner that you fully trust. You are looking for a company that understands your vision and project objectives and is committed to your success as much as theirs. They will take a lot less time to manage, as you won't need to monitor them closely.
Withheld Costs
Withheld costs occur when your fit out company deliberately downgrades the specification or scope of the project, without making it clear to you. They then re-introduce these as chargeable extras throughout the project. This is very unscrupulous, but some fit out companies will do this to reduce their initial cost or improve their profitability.
To avoid this, we recommend you work on a fixed-cost contract. Your design & build company shouldn’t be able to introduce extra costs partway through the project. You should also cross-reference the design package, and make sure everything is included in your quote before you sign the contract. At Zentura, we operate a fixed-cost policy, which means that any variations you don’t request are not chargeable.
Remedial Works
Remedial works involve fixing issues with your existing building or fit out that are discovered during the project. Common examples include leaking rooves or faulty electrics. As they can’t be detected before the works begin, they are very difficult to budget for, but they can have a big impact on your project. This is especially true for older buildings or buildings that have not been well-maintained.
To minimise the risk of remedial works costs, we recommend you have a building surveyor carry out regular inspections of your office. This will uncover any serious issues with your building, and prevent them from being discovered during the project. A project contingency can also be used to cover these costs.
Workmanship
Quality of workmanship is difficult to quantity, but it will have a huge impact on the upfront and hidden costs of your project. In a competitive pitch-to-win scenario, some companies may use cheaper subcontractors who have lower labour costs. This is a false economy if your office refurbishment requires a lot of rework in a few months due to the lower quality of workmanship.
The quality of workmanship is one of the most difficult areas to assess when comparing design & build quotes. However, there are several things you can do to ensure poor workmanship doesn’t derail your project. The first is to ensure your design & build company uses qualified subcontractors and staff. You can also ask your design & build company for references, and speak directly to their previous clients about their quality of workmanship.
Aftercare
The most overlooked hidden cost of your office refurbishment is aftercare. While office fit out companies will provide support during the project, many disappear as soon as the project is finished. There are two key parts to aftercare. The first is resolving minor issues that arise in your office as a result of your project, such as a faulty chair or TV screen. The other part is churn works – adjustments that need to be made to your workspace as your company evolves and grows over time.
To minimise the impact of poor aftercare on your office fit out, you need to assess potential design & build partners based not only on what they say but what aftercare provisions are in the contract. References from previous clients can also be very helpful to understand how their aftercare package works in practice, and how good their churn works service is. It is worth paying a higher price for a refurbishment company that provides a good aftercare package.
Keeping Your Refurbishment Within Budget
You're well aware of the problems that going over budget on your office refurbishment can cause. Thorough planning, excellent communication, and careful due diligence are essential to keeping your project within budget.
By planning your project carefully, you can minimise the cost of variations and remedial works, as well as the amount of your time that your project will take up. Thorough due diligence will help ensure you have no withheld costs, a good quality of workmanship, and an appropriate aftercare package. Of course, your needs will always change, so a cost contingency is also necessary. By following these steps, you can ensure your office fit out isn't derailed by hidden costs, coming in massively over budget.
Within-budget completion is just one part of a great office refurbishment. To truly be a success, your office fit out also needs to solve your workspace challenges and be completed on or before time. To learn more about how to achieve this, read 5 Steps to Office Refurbishment Success.
To take the next step to office refurbishment success, download your copy of How to Plan an Office Refurbishment. We’ll help you understand all that is involved in renovating your office by walking you through the process step by step. By the end, you’ll have a better understanding of what will be involved in your own office refurbishment, where you need to start, and where you need to learn more. To get started, download your refurbishment preparation guide today.
