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9 Factors That Increase Commercial Fit Out Costs (& How To Avoid Them)

When undertaking an office fit out or even office refurbishments, we've noticed some common errors that result in an increase in costs. To make sure you keep on top of your commercial fit out or refurb costs, be aware of these common mistakes and check our advice on how to avoid them.

clerkenwell office setups with blog title

The nine things which can cause the costs of your project to spiral out of control are:

  1. A Poor Tender Process
  2. The Wrong Contract
  3. Indecision
  4. Poor Design Choices
  5. Over Engineering
  6. Poor Project Management
  7. Delays
  8. Poor Workmanship
  9. The Wrong Contractor

And if you want to read about how to minimise the risk of these things happening or even completely remove the chance altogether, keep reading.

If you'd like to speak to a member of our team about your upcoming project simply press the button below or click here.

 

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1. A Poor Tender Process

The Problem:

A common error that drives up the final price of a project is to not spend the time conducting a full and proper tender process.

All respectable businesses should be the same. From a local builder who has priced a job to pave your driveway to a commercial fit out contractor, like ourselves:  a respectable contractor will recommend a prospective customer gets a check price.

The Solution:

In fact, the best practice is to get a minimum of three companies to provide a price. When comparing prices, make sure that everything you want to be included has actually been priced.

Either due to genuine error, trouble sourcing a supplier price or reasons a little more surreptitious and underhand, a contractor might not include everything you are expecting them to.

For example, your fit out comes in £10,000 under budget and everyone is happy. But then, in the final days of the project, you ask why the reception desk looks like every other desk in the office and wonder where the bespoke, hugely impressive, client winning statement desk is.

The contractor omitted your specified desk at tender stage and replaced with what they deem to be a reception desk. But you've unwittingly agreed to the change.

Check through all quotes thoroughly and be sure there's nothing missing or nothing extra in the price. And that each contractor has priced items to a similar specification. Only then can you avoid "comparing apples and oranges".

 

2. The Wrong Contract

The Problem:

Choosing the wrong type of contract. This can result in managing the progress of work and scheduling payments becoming a full time job which either diverts attention from day to day tasks or results in the need of having to hire a costly external Quantity Surveyor or Project Manager to minimise your risk.

The Solution:

It's probably best to choose an industry standard contract. The simplest for all parties is a simple lump sum contract. This involves the contractor pricing to complete all of the work on the architect's drawings for a set price. Anything added after the agreed date is priced separately as an extra.

But due to the extra risk for the contractor (it's easy to miss some little details when pricing a fit out project), clients can pay slightly more than on a measurement contract. But these are a lot more laborious and time consuming to work under.

There are plenty of contracts on the JCT website here.

JCT Contracts

 

3. Indecision

The Problem:

Not being able to decide on design options is always going to result in higher costs. It shortens delivery times which narrows the scope for sourcing a good price.

Even worse, changing your mind once something has already been ordered can be doubly costly as refunds and credit notes are not always possible.

Worse still is changing your mind on something once it is already installed on site. Not only do you have to pay the labour on installing the new feature (as well as materials), it will be your responsibility to pay for removing the original too.

The Solution:

Plan in time for finalising designs from the outset. Canvas several respected opinions and listen to the advice of your contractor.

Another tip is to try and avoid styles and design features which are merely on-trend rather than a meaningful step forward in general office design. Failure to do this is what often results in a client "changing their mind".

 

4. Poor Design Choices

The Problem:

Design issues themselves can include a poor layout, shoddy space planning or a whole host of other issues arising from a poor design.

The Solution:

Don't force your designers to succumb to your every wish and whim. If an architect or interior designer advises against X, Y or Z, it is for good reason.

 

5. Over Engineering

The Problem:

Similar to when we wrote about who really needs an expensive ergonomic chair in the office, elements of an office fit out can be over engineered. This means buying equipment and features which are far too robust (and expensive) for their intended purpose.

The Solution:

Think carefully and ask your contractor and suppliers about the intended use of your furniture and finishes. There may be savings opportunities which means your budget can be better spent elsewhere.

 

6. Poor Project Management

The Problem:

Complications arising on the fit out or refurbishment project due to a lack of proper organisation. This might include deliveries being late and labour being on site on the wrong days, for example.

It's a project manager's job to coordinate all the relevant trades to work together towards the final completion date.

The Solution:

Be sure to examine your contractor's project management record. Search for references and reviews and speak to your industry peers or other contacts who have undergone a fit out or refurb recently.

If things start becoming an issue, you can always hire your own freelance project manager if things are looking as though they could escalate into a full blown disaster.

 

7. Delays

The Problem:

Even a construction or refurb project with the best teams working on it can suffer delays. External events can cause delays in delivery - from floods to traffic jams - and accidents are (sadly) an occupational hazard in this industry.

To varying degrees, even isolated incidents like those above can have profound effect on a small project. Even larger projects and contractors aren't exempt from their suppliers or sub-contractors suffering things like credit issues or going into liquidation.

The Solution:

Be sure to build some slack into your programme of works. Have a contract finish date to work towards, but have an actual finish date that absolutely cannot be exceeded a short time after.

Delays do happen but spotting them happening at the outset is key to minimising impact. Planning all trades to start as early as possible is key to being able to do this.

For example, the electricians are due to return to site on Monday to complete the second fix and commissioning of the electrics. But due to a manufacturer defect with the wall covering, the decorators are still working on site.

The electricians can be put back a day, but it's not a problem because there is slack in the programme for precisely this kind of event happening.

 

8. Poor Workmanship

The Problem:

Due to a lack of skills, time or inferior product choice, poor workmanship will only result in higher costs. Either during the project itself, because of the delays rectifying the issues or after completion when defective work needs replacing.

The Solution:

Keep a close and regular eye on the progress and quality of work. A full and thorough snag list will help to manage this. And taking out a retention bond will keep contractors keen to complete any defective work spotted after completion.

 

9. The Wrong Contractor

The Problem:

Using a contractor better suited to another type of fit out or refurbishment project. Building homes is a specialised area of construction, as are commercial fit outs and office refurbishments.

The Solution:

Be sure to fully research your prospective office fit out contractors before inviting them to tender for your project.

For example, browse their recent projects and ask for a portfolio.

project portfolio

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