How to plan your construction project budget

A realistic budget is the foundation of every successful construction project. Before breaking ground, it pays to understand where your money will go and how to protect it.

1. Start with a clear scope

Define what you are building in as much detail as possible: size, specification level and finishes. Vague scopes lead to variations, and variations lead to cost overruns.

2. Include soft costs

Design fees, permits, authority charges, insurance and testing often add 10–15% to the construction cost.

3. Keep a contingency

Set aside 5–10% for unforeseen conditions such as ground issues or late design changes.

4. Choose the right contract

Lump-sum, design & build and cost-plus contracts each carry a different balance of risk. Your contractor should explain the options clearly.

The cheapest quote is rarely the lowest final cost. Compare scope, programme and track record, not just price.