9 Ways to Get More From Your Project Budget

As you consider capital changes to or expansion of your healthcare campus, here are several principles that may help you spend more wisely, save money and focus funds in serving your customers.

First Thing: Understand what your Project Budget Includes

This is an often under-rated issue. Know what your project budget includes.  We continually experience owners thinking “the budget” includes design and construction. We addressed this in a previous blog, but it is always worthy of a reminder. A project budget should include costs for feasibility, design, construction, medical equipment, furniture, technology, administrative, real estate and financing. Starting with the wrong project budget will continually haunt a project.

Be Purposeful

Budgets and costs left unmanaged increase quickly.  Establish realistic budgets for various line items as early as you can and then manage, manage, manage to those budgets.  Be in control of the budget rather than letting it control you.

Start Early

Setting up a detailed project budget can be a lot of work but it pays great dividends throughout the project cycle.  An experienced Project Manager or Owner’s Representative can help you prepare and maintain this critical planning tool. (a minor sales pitch there)

Masterplan

It is a wise business strategy to continually look into the future to plan and organize your physical capital needs to properly project long term growth.  Master planning can be healthy for operations as well as project budgets.  Master planners can give you a fresh look at your existing facilities and an unbiased road map to guide future growth. But make sure to start with a business plan.

Seek Operational Efficiency

When users become habituated to their existing operation they forget that there may be more efficient methods of utilizing the same or possibly even less space.  Even if higher efficiency is not the total answer it may still offset volume increases or a significant portion of the demand for increased space.

Consider Your Options # 1

Don’t assume your project needs to be built on a new site.  The best site may be the one you already occupy.  Co-locating new expansion on your existing campus may make your operation fit and function more efficiently and site development costs often are reduced when shared with an existing use.

Consider Your Options # 2

Consider co-locating your new facility on top of or at gaps within your existing facility plan.  While the cost to build vertical or to build infill can be higher than stand alone space it often makes for better integration and can cost less to operate.

Establish a Sense of Urgency

Time really is money.  Construction costs are nearly always on the rise.  Set an aggressive but reasonable schedule for your project, monitor your progress and be flexible.  By deploying your project capital more quickly and shortening the construction period your project budget will buy more value. The best rule of thumb to remember is that the longer something takes, such as decision-making, design, financing, construction or move-in, will generally cost you more.

Own the Budget

Designate someone (or several) to watchdog the budget and rely on them to manage your dollars effectively.  It is often helpful for an outside project manager or owner’s representative to help you make tough calls and substantiate those tough calls to the staff or management team. But as I always say to clients, do not cross the “stupid line”.

And if all else fails, feel free to call us for advice.

2 thoughts on “9 Ways to Get More From Your Project Budget

  1. Bob –
    I agree with all of this and the TIME IS MONEY is so accurate. So many clients take months to decide to do the project, sign the architects agreement and stall during the decision making times of the design phase. Urgency is the way to go, methodically march through the process to get the project under construction, the sooner the better.

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