How to Set Your Utility Project Budget
Utility projects are expensive. From labor costs to material costs and maybe even construction costs, you will be spending a great deal of money throughout the project.
As one of your responsibilities, you have to budget for that money before the project can begin. The trick is making a utility project budget that you can keep.
It is all too easy to underestimate the project cost and have to overspend later in the project. Especially with the rate of inflation, material costs are hard to keep up with. However, if your budget for too much, your boss may not be happy with the large project expense.
Somehow you have to make the perfect budget—not planning for too much or too little expense.
We have a budget process you can follow. These steps should help you set up a budget that you can stick to for the whole project.
It may be tempting to start estimating the project’s total cost right away and build your budget quickly. But that hasty method usually does not produce accurate total projected costs. The best thing to do is research similar projects before you even begin making your budget.
You should look at some of the recent projects that have been completed and see how they built their budget. You can compare the actual cost to their cost estimates, which will give you an idea of how accurate their project s budget was. Additionally, you could look at construction projects. Sometimes a construction project budget can provide insights that you would not have gotten from the utility industry.
Research the current status of the market. Especially if your project will last a while, you need to know what the market trends are and how much your costs might change over the next few months.
Define the Scope of Your Project
After you have done some research and have a general idea of what your project plan budget may include, you need to define the scope of your project. This will help you craft an accurate project timeline and ensure you can complete the project on time.
Talk with your supervisor to determine exactly what the project should accomplish. Then, write down those project goals so they are clear and actionable. Write down the project constraints and what the project excludes to create a project scope statement.
You need this information written down so you have a clear definition of the project scope. Scope management is essential for your final project delivery. With an undefined scope, your project size might steadily increase, and you will run out of budget money quickly.
Consider All Costs
With a clear idea of the project scope, you as the project manager can make a list of all the costs your project will include. You need to be thorough, so use the research you gathered to give a good indication of what costs you should include. Then, mentally work through the project, noting every time you need to purchase more materials or use a service.
Some general costs you should consider are:
Labor costs (hours worked, fixed labor costs, indirect labor costs)
Real estate costs
Professional services costs
Separate Hard and Soft Costs
Now that you have a list of all your project costs, you should separate them into hard and soft costs.
This is a common practice among construction project managers, so it should prove beneficial for you as a utility project manager.
Hard costs are the expenses directly related to your utility project, including the cost to pay your team members, the cost for the materials like wooden poles, and the cost of gas for your equipment. On the other hand, soft costs are expenses that are not directly related to the physical project. These are services that you use before the project and after the project, like any engineering or legal fees.
Hard costs are easier to estimate as they do not fluctuate frequently, so you should account for these in your budget first. Then, you can estimate your soft costs. As these costs can change frequently, budget more than you anticipate needing for them.
Allow for a Contingency Fund
As you are finalizing your project budget, be sure to add a contingency fund. This fund is simply money reserved for any unforeseen expenses.
You can do all the research you want and work very hard to account for all the costs your project may incur, but you will never be able to exactly predict the future. There is always a possibility that something unforeseen could happen, and you want to be prepared. A contingency fund helps you prepare for whatever may happen in your project because it can cover your unplanned expenses.
Look Beyond the Bottom Line
Another thing to consider in your budget is the value you are getting for the expense you spend. Naturally, you want to reduce costs as much as possible. But budgeting for the cheapest materials and services is not a good practice because you may not get the quality you need. You have to look beyond the bottom line.
For example, you might need to hire a general contractor for part of your utility project. You look at two options, and one’s services are much cheaper than the other. But the cheaper one does not have much experience, so they will not be able to manage construction as well as the more expensive one. In this case, you should hire the more expensive contractor because you want the high-quality work and experience they have.
You can look for bargains and aim to save money, but also remember that you want quality services. So, try to balance quality and cost in a way that best serves your particular utility project.
Budget for Utility HaulingServices
Finally, remember to budget for transportation services as you are listing your costs.
The materials you need for your utility projects—like wood, steel, or concrete utility poles—are overlength, heavy, and difficult to haul. Trying to haul them yourself costs valuable time and could endanger your team members if done improperly.
You need a professional utility transportation service to safely transport your materials to the work site. This hauling service should have certain qualities, like offering self-unloading services, being an asset-based hauling company, and having experience with utility materials. That way, you will receive reliable service, and your materials can be transported without issue.
Black Resources Professional Utility Hauling
Blackwood Resources is a quality transportation service you should budget for.
Since 2017, we have been partnering with the utility industry and hauling utility materials all across the country. We have experience with wood, steel, and concrete utility poles along with pilings, pipes, and other oversized materials.
Our specially equipped trucks allow us to unload ourselves, saving you time and keeping your crew safe. These trucks can also perform railcar transloading, so you don’t have to contract any additional loading services. Our goal is to make your utility transportation as easy as possible, so we will take care of everything from loading to unloading.
We are also an asset-based hauling company, so you can work directly with the crew that will be hauling your materials. This crew is professional and one of the best in the industry, so they will do their best to provide you with the quality customer service you deserve.
Ready to add Blackwood Resources to your budget? Contact us today at 812-676-8770 or firstname.lastname@example.org to see how we can help with your upcoming utility project.