We find that many people interchange the terms “project budget” with “construction budget”. This can lead to missing capital cost categories in your project budget and thus under-projecting budgets for capital projects from the get-go. One of the fundamental requirements of a project during the feasibility phase is defining the total Project Budget.
It is important to remember that a Construction Budget typically only includes construction costs. Let me state that again…… It is important to remember that a Construction Budget typically only includes construction costs.
A Project Budget for a healthcare project should consider including many if not all of the following categories. We show ranges for the percentages of the total project budget on several categories below which are based on various projects we have worked on.
- Construction. Building and Site Work 50-70% of total project budget
- Medical Equipment 7-12% of total project budget
- Technology 5-10% of total project budget
- Professional Fees 8-10% of total project budget
- Furniture, Fixtures, Artwork 3-5% of total project budget
- Administrative Costs Varies
- Land Costs Varies
- Financing Varies
- Project Contingency Depends on the project scale & complexity
- Escalation Varies