Construction projects ultimately come down to the bottom line. Preconstruction planning helps you do more with less, and it also leads to more accurate budgets and forecasting. Planning makes budgeting more accurate by identifying all potential costs and cost-saving opportunities up front. Instead of going into a project with a rough idea of the costs, you’ll know exactly what to anticipate and can work it into your budget. Inaccurate budgets can lead to many issues.
If your budget ends up being lower than the project’s true cost, you may have to scramble for additional capital and take out unfavorable loans or turn to fast funding opportunities that take advantage of those in need by providing exorbitant interest rates. Even if you have enough capital to pull from within your business, this could cause future operational disruptions as you’re dipping into funds allocated for another purpose.
If your budget ends up being higher than the project’s true cost, you’ll allocate more money than necessary for a project. While this is a better alternative to under-budgeting, it wastes time and resources and requires you to move the excess money around after project completion. Additionally, over-allocating resources to a project means that those funds are pointlessly held up when they could better be invested in other opportunities.