These Projects Don't Just Happen: Budgeting

The other day I was chatting with a prospective client on the telephone. I asked them what they wanted to accomplish with the project and the wishing list was huge: a complete renovation of a kitchen, 2 bathrooms, and new flooring throughout the 2-story home. They were willing to work on the design portion at any time, but when I asked them about their budget, they stumbled a bit and spit out a $50K total. All in.

I know that to some this is a large budget and will likely never see that amount in their bank account, but what I also know is that the beautiful projects on our website don't just happen. I'll explain why this is a low budget in a bit, but when confronted with a beer budget for champagne dreams it is impossible to overcome the objects ions. Projects take time to develope and they take money to execute. 

 The Budget Breakdown

Pick One, Not All

Full-disclosure: the examples I'm about to list below are not high-end projects but rather they are entry-level with base-line finishes and not what you would see in shelter magazines. They will be similar in style, when designed right by a skilled professional, but not always feature magazine worthy. Here's how I recommend that this budget would be spent using the example above: 

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Option 1: Bathroom Renovation

$52,000 plus taxes

  • Permit application and inspection fees - $2,000
  • Demoltion & disposal fees - $1,500
  • Construction to relocate walls, build bench seat, block walls - $3,000
  • New bathroom cabinets & counters - $5,000
  • Cabinet Installation - $1,000
  • New tile in the bathtub area and floor - $1,500
  • Fancy shower pan - $2,500
  • Installation of tile and waterproofing - $3,500
  • New alcove tub, sink, faucet, and bath/shower fixtures - $5,000
  • Frameless shower glass - $3,500
  • Steam shower generator - $3,500
  • Plumber/HVAC to install fixtures and fan - $3,000
  • New ventilation fan, lighting, outlets & switches - $1,500
  • Electrician to install lighting, update outlets & switches, connect generator - $2,500
  • Painting - $2,000
  • Desig/P. Eng. fees for project and permit drawings - $10,000
  • Project management fees - $5,000
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Option 2: Finishes Update

About $45,000 plus taxes and sweat equity

  • Replace the flooring throughout - $10-15,000
  • Paint the whole home - $8-15,000
  • New kitchen sink & faucet - $1,500
  • New dishwasher - $3,500
  • New quartz countertops in all rooms - $12,000
  • Plumber to install sink & dishwasher - $1,000
  • Hire us for 3 hours for a Colour Consultation - $600
  • You mange and coordinate (give yourself 12 hours per week, minimum) 
  • About 4-6 weeks
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Option 3: Kitchen replacement (not renovation) 

$64,800 plus taxes and sweat equity

  • Demolition and disposal fees - $1,500
  • New kitchen cabinets in exact same spot - $30,000
  • Cabinet Installation - $4,000
  • New quartz counters in kitchen - $8,000
  • Backsplash tile - $500
  • Install backsplash tile - $1,000
  • New kitchen sink and faucet - $1,500
  • New pendant and track lighting - $3,500
  • Plumber/HVAC to install sink & dishwasher & exhaust fan - $1,000
  • Electrician to install lighting, update outlets and switches - $1,000
  • New free-standing range & fridge, exhaust fan, built-in dishwasher, counter microwave - $8,000
  • Use our Design Express for the basic kitchen design - $4,800
  • You do the painting, management, and coordination (give yourself 12 hours per week, minimum) 
  • About 2-3 months (if everyone is available) 

The Homeowner Challenges

1. The 60/40 + 20 Rule

Everyone has an opinion on this, but Vancouver, British Columbia has one of the highest construction costs in the country, if not the continent. There are socio-economic factors that affect project budgets such as travel time across the lower mainland, housing costs in the areas we live in, gas to drive, permit and inspetction fees, and then all these costs affect each business differently and the employees that work there.

Projects budgets break down into 40% of the budget allocated toward construction (management and materials) and 60% allocated toward products. Additional costs are 10% allowance for design fees and 10% reserved for contingency. It's important for owners understand if their project budget includes or excludes design fees and contingency because those are two different types of project outcomes. If a $50K budget includes fees & contingency, then the actual budget is $40K and that is a big shift.

2. The Design Variables

I recommend if anyone is considering a project to start by browsing at reputable suppliers/retailers and avoid big box stores or online stores. These mass market shops are low on service, high on supply so they may be fast, but they are low on quality so the price will be cheap. Similarly, an item may be ready to ship today, and it has the brand-name quality, but add on the shipping charges and it is not a cheap as you think. These variables are considerations that need to be applied at all times during a project from conception to completion, but you can only have two at a time.

Image courtesy Tinker Creative

Image courtesy Tinker Creative

3. The EQ Factor

We work aggressively with our clients to stay on top of their budget, but at the beginning of the design process we can not know all the details and discussions that will happen. We also don't know how a client will respond to a particular selection or recommendation. Perhaps there is some experience in their past that will elicit a negative reaction. I call this our Emotional Quotient (EQ) Factor. We are professionals, decisions and objections are safe and supported, yet where we think we're going and where we end up may be two different places. What we need to be aware with our EQ is rejecting a selection or solution outright in the absence of a discussion.

4. The Imposters

Sharing knowledge and experience can be a challenge when any blogger can write about anything for money. Pay attention to the qualifications and skills of the writer. Do they offer a $500 laundry room makeover solution or a $150 bedroom re-do? Cheap is cheap, there is no disguising it, and media is out there everywhere to try and create an industry of fast design. Pay closer attention to what you watch on all those reality home and garden TV shows (qestionable "design" shows at best) and channels that offer sensationalist view-points. Real costs of real projects are much higher than the promotional sponsorship information that is regurgitated over and over again. Imposters are everywhere.

Based upon the quick-sort budgets shown above and our homeowner challenges, a realistic project scope that aligns to a realistic project budget will be the best opportunity for successful project outcome.