Budgeting for your project and the need for contingency funds.
So you have saved and saved. Diligently opting for the Tesco brand pasta instead of that fancy Italian kind, and finally, after all your hard work you have the available funds for your dream project! The day arrives and the builders start unloading their tools and materials. You feel a sense of joy as you hear the crunch of the digger breaking through the earth as it prepares the first foundation trench to your new extension. But suddenly everything stops. The digger gets turned off and you see the site manager shaking his head as he stands next to the newly dug hole. He’s on his phone and although you can’t hear him from behind your kitchen window, you can see he’s frantic- waving his arms and stomping his feet. You wonder what on earth is going on? It’s not long and a white van pulls into the drive and a group of men with lab coats and white hard-hats get out. They walk over to the hole and look inside. There’s a rush of bodies and lots of shouting. A yellow barrier tape promptly gets laid around the edge of the trench. Suddenly there’s a knock at the door, it’s the site manager. He sheepishly looks down at his feet, struggling to meet your eyes. With great effort he finally looks up and says, “I’m so sorry, but our digger has unearthed a 700 year old mummy and we have been instructed to halt work until an archaeological team can exhume the body.”
“Well how long is that going to take?” You ask nervously.
“Up until next Christmas I’m afraid.”
Even though this story is unlikely to happen to you. (Except that a 700 year old mummy was indeed found in an excavation in China some years ago) Set-backs and project disruption are a reality. This is why it is so important to set aside contingency funds for your project.
What is a contingency fund?
A contingency fund is simply a reserved fund set aside to handle unexpected costs that are outside the usual operating budget. This money is not allocated to any specific part of the project but only serves as insurance should there be any unforeseen costs. Not every project requires these funds and at DK building we are proud to say that most of our projects run smoothly on time and within budget. That’s what DK building’s 15 years of experience brings to the table. You can rest assured that schedule and staying within budget is paramount to DK building. See DK’s page at FMB and Trustmark for added peace of mind.
Some situations can’t be avoided, here are a few examples that have happened in the past on our building projects.
Velux windows in a bomb shelter?
DK building is currently working on a large renovation project in Liverpool and one of the tasks is to install Velux windows into a kitchen roof. The clients wanted more natural light flowing into their kitchen. When the day came for our builders to open up the roof they were surprised to find that the roof was made of 200mm thick reinforced concrete! Upon estimation everything looked normal. There was a ceiling and the roof looked the same as the rest of the property. The only way to have known it was actual concrete was to open up and expose the roof. After consulting with the client they agreed that the only way to install their Velux windows was to demolish the entire concrete roof and build a new one. So the DK building team brought out the heavy duty concrete breaker and after filling 4 skips, the roof was out. This Snag in the project meant it would cost more and take longer than the clients had anticipated. Daniel communicated clearly with the clients every step of the way. Because the clients knew about the possibility of using their contingency funds they were able to continue with the process of installing Velux windows in their Kitchen.
Asbestos in the floor? Who you gonna call…
On a DK building project a property was being renovated. After beginning with the work asbestos was found in the floor. This meant the insulation boards needed to be removed by a professional asbestos removal team. This was an extra cost incurred by the client and could not have been foreseen beforehand. The asbestos removal team was prompt and prepared the site safely and the DK building team was able to resume with the project with only a short delay.
To summarise
Budgeting for your project and the need for contingency funds.is an important part of your project. It lessens the damage of unforeseen risks if and when it occurs. Even though the need for contingency funds are rare, it will help you immensely if extra money is needed. At DK building we understand your expectations to have the project completed on time and within budget. Before a project starts, we try our best to advise you about all possible situations that can occur giving you a solid idea of what to set aside in case unexpected costs or situations present themselves. We can help in terms of Garage Conversion costs, home renovations, anything at all, please get in touch. alternatively you can see DK’s about page to see who we are! At the end of the day, budgeting for your project and the need for contingency funds are invaluable and a key part to your projects success.
