Commercial Structure Budgeting

19 November

The 4 things you must know when budgeting for a commercial shed

SteelTalk webinar series: Episode 1
When looking to build a new commercial structure, we find that a lot of people only think about the land and the shed costs when considering their budget.

However, there are four things that are often overlooked when budgeting that can cause unwanted surprises down the track.

To avoid overextending yourself or taking on an uncomfortable debt, we recommend getting your head around the other costs involved – and being aware that the shed itself is often only about 10 – 20% of the overall cost.

The 4 most overlooked costs when building a commercial shed:

1. The building fee
2. Planning costs
3. Civil costs
4. Fire service costs

Let’s take a closer look at these elements of a commercial shed project.

The building fee

There are two ways to approach building a commercial structure: as an owner builder or a commercial builder. The choice really depends on your budget, skill set, and how much time you have available.

Let’s look at the pros and cons for each option.

Being an owner builder

If you choose to go the owner-builder route, you can save significant dollars however there is much more you’ll need to take on yourself.

As an owner builder, you’re responsible for all the project management, so you’ll need to have sound time management and budgeting skills as well as practical know-how.

Choosing to be an owner builder also means that you can stage the construction over a longer period of time, and in turn spread the costs over a longer period. This makes things easier from a cash flow point of view, but draws out the building process over many more months or years.

Best for: people with ample time and tighter budgets or less upfront capital available

Working with a commercial builder

Choosing to work with a commercial builder saves significant amounts of time but of course, costs a fair bit more.

Additionally, you’ll need to have a healthy cash flow and the deposit available at the outset, as well as being able to cover the milestone costs as the project progresses.

The main advantage of going with a commercial builder is that they are experts in their field and have a strong focus on getting things done quickly and efficiently. Using a commercial builder allows you to focus on your day to day business and let someone else handle the project management for you.

Best for: busy people with little free time who have the lump sum available and can outsource the project.

Planning and architectural costs

There are a few experts that you’ll need to bring in to get your shed project up and running. You’ll typically need to budget around 10 – 20% in third-party fees for planning, engineering and architectural costs.

Architect

The first is an architect who can prepare detailed designs, work out elevations and ensure the overall design is compliant with the relevant Codes. Using an architect saves money by ensuring that you have a lot of the design work done already.

Engineer

An engineer will prepare soil reports, as well as signing off on civil engineering and structural engineering processes.

Council Inspection

Council fees are an unavoidable but critical part of your project. A council representative will need to inspect and approve your design and this process involves a levy, a lodging fee and often building survey costs as well.

Tip: Be aware that the Council approval process could uncover surprise costs, such as the cost of having to maintain a road near your property.

Civil costs

Preparing the site

A good way to think about civil costs is to consider everything from the ground down. This includes site works like levelling, clearing and cut and fill. The more level your site, the cheaper and easier the civil work will be, so if you haven’t purchased your land yet this is a good thing to keep in mind.

Think ahead and get a good site if you can, so you can save more of your budget for the actual shed!

Drainage and services

Civil costs also include drainage and service connections on site. This means there’s likely to be costs involved for labour, trenching, pipe works, pits, storage tanks, retention tanks and connections including water, septic and data cabling.

Landscaping costs

Landscaping is often an afterthought, but it can be a required element of your project by some Councils. Things like fencing, car parking, retaining walls, curbs and garden beds fall under landscaping costs.

Fire service costs

Being prepared for a fire is critical to protecting your building, your assets, your neighbour’s property – and of course, you and your team.

Fire costs are mandatory for buildings over 500sqm. Whilst you can get away with hose reels for smaller sheds, larger structures will need more involved infrastructure on site to help firefighters contain the fire in the event of a blaze. This means you’ll need to budget for having your own assets on site, such as storage tanks with pressure pumps (pressure pumps being the more affordable option for rural properties).

You will also need a fire service that comes to your site annually and looks after inspection and maintenance of your fire assets.

For large properties over 2500sqm, the required infrastructure gets more complex, as you will need sprinkler systems and other fire fighting equipment installed in your commercial shed.

Tip: you can avoid this need for complex fire services by breaking up your building with fire walls to create self-contained spaces that are no larger than 500sqm. However – is it practical? Will it affect the usability of your structure? Sometimes it makes more sense to just take the hit and install the required fire equipment. See more detail about fire safety guidelines here

We’re here to help

Steelcorp is one of Wangaratta’s most respected shed builders, specialising in large commercial, agricultural and farm sheds.

We’re here to provide advice throughout your project, so give our team a call if you need a hand, and catch the full series of our SteelTalk Webinars on commercial sheds.

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