Commercial Renovation and Realistic Budgets

Whether you are a restaurant or a club, improvements are great for making your business stay relevant and efficient. Renovations can be quite costly. However, with a realistic budget, you will be able to undertake your repair without breaking your accounts.

Although some people find budgeting restrictive, it helps you anticipate your expenditure, seek better bargains to save on costs and avoid overspending.

Creating a realistic budget does not necessarily require that you involve a banker or a financial consultant. However, it is important that you include your management team.

Here are four steps that will help create a realist budget for your next commercial renovation.

1.    Evaluate your financial records

You need to be clear about your current financial state. What are your incomes and expenditures? How much profit do you have? Can it finance your renovation? Would you need to take a loan to finance the revamping process?

Ideally, you should do your financial analysis a few months before you beginning the renovations. Use your financial documents; consult the banks on your accounts status to have a definite idea of your financial position.

2.    Determine your gross income

How much income do you have regarding salaries, profits, interests, bonuses, grants and other sources?

3.    Determine your total expenditure

How much money is going out to pay expenses? Determine all your expenses including fixed expenses, recurring bills such as rent, insurance, targeted savings, discretionary expenses such as entertainment, advertising, traveling costs and other miscellaneous costs.

4.    Establish your net income

Subtract the costs from the gross income to determine your net income. It represents the amount of money to use for renovating your commercial building. The extent of your renovation is dependent on the amount of net income.

Research thoroughly to determine realistic costs for labor, construction materials, council fees, contractor’s fees and other charges you anticipate. Then and only then, can you commit to a particular overall budget amount.

Spending quality time on planning and budgeting ensures that the process runs smoothly, and you get rid of frustrations that may occur as a result of unrealistic budgetary allocations.

 It is crucial that you involve your management team and consult extensively with the relevant persons both on the renovation and budgeting. Furthermore, this enables that you to get the most affordable resources while fulfilling your long-term aspirations.


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