Maybe your company or organization has outgrown its current location. It could be your industry demands a move to a new location or an expansion into new territories. Whatever the reason, you’re now considering a commercial construction project. There are certain things to know and others to consider before you begin your journey. Chances are, even if you’ve spearheaded a commercial construction endeavor before, there are still aspects of the process that will be new or foreign to you. What hasn’t changed are the basics. These are the phases and considerations to evaluate now when you’re ready to start a new project.
Divide Your Details and Considerations into Phases
There are different camps out there highlighting various official phases of a commercial construction project. Here are some you can use to separate your plan and strategy efforts into manageable decisions.
- The Development or Planning Phase
- The Pre-Design Phase
- The Design Phase
- The Pre-Construction Phase
- The Procurement Phase
- The Construction Phase
- The Post-Construction Phase
Imagine these segments as chapters along your timeline. And it can be helpful to focus on each individually to create a roadmap for your project, detailing each decision so as not to overlook any significant considerations.
Renovations vs. New Construction
Depending on your motivations to explore commercial construction projects, you’ll need to decide between renovating an existing structure or building a new one. This is a conversation you’ll want to have with all stakeholders since there are pros and cons to consider for each. Your budget will determine how much growing you can afford to do. But if your location continues to be ideal and there is physical room to add on to your existing building, it’s worth considering a renovation over a new construction project altogether.
Consider these advantages and disadvantages:
- Renovating is usually faster and less expensive
- Renovating and new builds both allow for customization
- New construction has some financing advantages
- Construction project duration concerns
- New design versus redesign efforts, costs, and concerns
Market Area and Location Considerations
One of the first aspects you’ll need to consider with your stakeholders or board members is the location and market analytics. Before building anywhere new, you’ll want to run the necessary numbers to ensure the location and market will sustain your enterprise and facilitate a growth environment. The most beautiful new building won’t matter if it’s located in a declining market or non-conducive region.
Here are other location-related considerations to add to your board discussion list:
- Planning, zoning, and permitting requirements of an area
- Economic development in the regions
- Unemployment and sustainability metrics
- Population and census details
Creating Your Business Plan First
With your market analytics in place, you can then develop your business plan. A formal business plan behind your commercial construction project will ensure you’re able to follow up with every next step in the process. This business plan should include analytics of possible construction sites, basic layouts of construction plans, market metrics, and earnings projections. Include a new name for your new commercial building, too. Having a thorough business plan will be necessary for banks and other future partners.
Budgets and Financing Considerations
Before you embark on any construction project, you’ll want to be precise with your budget and financing limits. Explore all your options for financing your project, and shop around. Compare rates. Host the fundraisers. Get feedback from all parties, including professional advisors for your organization who can help you plan sustainable financing for any project. With borrowing power in mind, you can set estimate parameters you can use as you develop the remaining details of your plan.
A proper budget review will consist of:
- Analysis of income and expense projections throughout the project life cycle
- Assessing funding requirements for similar projects undertaken in the past
- Pre-design requirement analysis
- Review of available financial resources
- Discussion of preliminary design alternatives
- Costs of construction
- Approval fees
- Planning and site assessment costs
- Labor costs
- Fixtures and equipment installation costs
- Cost of decanting and relocating
- Contingency planning
Choosing Your Commercial Construction Partners
You will need to be prepared to assemble a team of professionals to shepherd your commercial construction project from start to finish. Start by creating a list of which professionals you’ll need, including designers, architects, contractors, and representatives. From there, you can then discuss your plans for identifying partnership candidates and vetting them to find the best. Before you begin your commercial construction project, lay out the guidelines by which you will select your best vendors and partners.
Proper vetting of every commercial construction vendor should include:
- Securing fair estimates
- Comparing a full scope of available services
- Identifying key management roles within each partnership
- Verifying a transparent policy of communication
- Assessment of past projects, including those similar to yours
- Request for references and testimonials of past projects
- Meeting of the involved teams
- Review of safety and sustainability records
- Confirmation of proper licensing, bonding, and insurance
Preparing for the Unknown
As with any business endeavor, there will be circumstances and scenarios that occur beyond your control. You should prepare for those instances of setbacks, along with contingencies that allow you to keep your commercial building timeline and budget. Risk assessments are critical to any project, and they’ll help you outline solutions and strategies that will ensure you don’t lose ground on your efforts.
Risk assessments start with:
- Creating a list of potential risks
- Assign priority to those listed risks
- Consider time delays, including weather or supply chain lags
- Ensure complete approval for all potential contingencies
- Share all contingency plans with stakeholders and partners
Establishing Communication and Chain of Approvals
We’ve talked about planning ahead for contingency approvals, but there are other approval and communication considerations to resolve before you begin your commercial construction project. With so many moving parts and participating entities, there will be countless risks of miscommunication or time delays due to approvals. Develop a communication tree and discuss the who, how, and when associated with each step requiring organizational approval. Share these details with everyone involved and set those expectations early. There should be no guessing about who needs to approve what or emailing versus phone calling for project questions and updates. Create these channels and guidelines now so everyone can be on the same page when you’re ready to break ground and begin.
Be Patient and Flexible
Anyone who’s experienced a successful commercial build from start to finish will tell you the key to that success was the process. And while creating your roadmap and guidelines are essential as a foundation for a seamless engagement, there is still something to be said for remaining patient and flexible. Before you begin your commercial construction project, prepare yourself mentally for a journey that may present curves and obstacles. What you plan for now might not be the best way forward later, either. Decisions about tools, resources, processes, and materials can all be subject to change. Don’t be rigid to the point you fight the flow of efficiency and progress. Keep your guidelines as just that, a guide. And with those pillars in place, you’ll be able to remain flexible.
If you’ve collectively decided to expand via a commercial construction project, keep these considerations in mind before you begin. And, as always, for additional insights and advice, rely on the expertise of Jerdon Construction! We specialize in a variety of commercial renovations and new construction projects, from faith-based organizations and schools to warehousing and office buildings. Let our expert team be your guide as you embark on this long-term investment journey, and have the peace of mind, too, that you’re working with Lehigh Valley’s best! Contact us!
