One of the first things we accomplish when we take on a new client is to nail down just how much the church can afford. Understanding Affordability is the Critical Success Factor in any church construction project. One of the biggest communication miss-steps is when the church says they have $3,000,000 to spend, and then they begin to design a $3,000,000 building.

Today, I’m going to walk you through 3 budgets you need to be concerned with during construction:

1. Construction Budget – Just like it sounds, the construction budget is everything involved in the physical construction of the building. That sounds simple and it  can be. If you’ve ever heard the phrase “good fences make good neighbors” you get the sense of how important it is to determine exactly what the builder is planning to be responsible for. Because if they aren’t responsible for it, guess what….you are. You need to ask a million questions, and make sure that both you and the builder understand who is responsible for what items. When they respond, if you have gaps in your understanding, ask another question. (For more on this technique, try to explain to a 7-yr old girl why she can’t watch Hanna Montana like everyone else. When she starts asking questions, you’ll get a good feel for how you should question your builder.)

CLARITY = GREAT RELATIONSHIP

2. Soft Cost Budget – The Soft Cost Budget is everything related to the project that isn’t covered under the Construction Budget. Things like audio, visual, lighting, furniture, fixtures and equipment. Permits & preparing the site may or may not be covered in the construction cost. There are quite a few items that fall into this category. Usually between 25% and 40% of the cost is related to the Soft Cost Budget. That means in a $3,000,000 budget, $750,000 to $1,200,000 will be soft costs.

Can you see why it’s important to make sure you let the budget drive the project?

3. Total Construction Budget – When a church tells me they have $3,000,000 for construction, this is usually the number they’re talking about. Most churches think in “soup to nuts” terms when it comes to money. As mentioned above, it is incredibly important to determine just what the Total Construction Budget is as early in the process as possible, so it can be used to make every decision that adds or takes away cost from the project.

I like to manage these 3 budgets as independent parts of the whole. When a church decides to add $50,000 to their audio budget, I want them to make a decision about where it comes from in another part of the budget. Does it come out of the furniture budget or are we giving up square footage for it? This is exactly how we manage our personal budgets, right? We don’t spend money first, and then ask to have our budget increased. We try to get as much as we can for what we have.

If you have any questions about putting your budget together,  please contact me at rwchancy@cogun.com. I’d love to help!