As we continue following the road map to your dream church building, the last preliminary stop is creating a realistic projection of the costs of the project. These should be based on the schematic designs we discussed in our last post.
It’s important to keep in mind that a budget is not a project quote — something you’re going to sign a contract on — it just gives you an idea of the overall costs, based on the schematic design, to plan fund raising and loans. Here are the four main components of a good preliminary budget.
Building Materials and Construction
One expense that probably comes to mind when thinking about a church building budget is construction costs. It’s typically the first thing everyone thinks about. And yes, the most significant component of your budget is likely to be materials and construction, but there’s more to consider.
If you look at this sample budget, you’ll see that the costs associated with building a new space and remodeling an existing space make up the most expensive component of the budget, but with that new build comes site development, which is also significant and needs to be included.
Site work is dependent on your church design. Is it a new building, a remodel or addition? Each has different site needs. In this example, note the estimated costs for dirt work to accommodate a new building and parking lot expansion. When we say, “dirt work,” we mean the work that’s required to create a stable and supportive foundation. Pouring concrete sidewalks and setting up water, sewer, gas, and electricity for the new building also fall into the site development category.
Plans and Fees
Your preliminary budget should include costs for plans and fees, also outlined in the example. These fees can include building permits, soil bearing assessments, and the costs associated with architectural and site engineering services. These costs can also be significant, depending on the project.
Furnishings and Equipment
New furnishings and equipment costs also need estimating. This can include chairs, tables, sound systems, video systems, phone systems, classroom furnishings, and more. You will find these expenses in the example listed under owner directed expenses.
Notice that there is also a contingency of over $40,000 in the example. It’s important to have a contingency to cover unexpected expenses that come up during the building project. It acts as a safety net to cover additional furnishings, or other things that may come up.
Finally, you should be aware of the inflation process. In this example, the inflation is listed as 1.5% for every six months. That’s very low — today it’s anywhere from 4% to 4.5% for every six months. If you’re in the very preliminary stages, like in this example, you’re probably six months or a year away from building. That’s why your preliminary budget should include some more money for the inflationary costs, so you’re fully prepared to meet the expenses by the time you’re ready to build.
Want to learn more about church building and design? Register for one or all of our i3 webinars, which cover a range of topics related to planning and executing any new build or remodel. These live, free sessions can be streamed from your computer and give you an opportunity to ask questions.