Commercial projects differ from residential projects in several important ways. Specifically, you may need to manage a large team of professionals in commercial projects, including plumbers, electricians, and carpenters.
In addition, you will likely need to deal with the bureaucratic and administrative aspects of the project because commercial projects involve multiple stakeholders, including the city government.
The best way to avoid these unexpected costs is to do your research beforehand. Here are some expenses you may encounter during your commercial construction project.
Permits are required for nearly all commercial projects. The amount charged will depend on several factors, including the following:
- Permit fees vary greatly by city and state
- The type of project (e.g., new building or renovation)
- Construction materials
- The size of the project (e.g., the number of stories)
The permit cost would be a small amount of the project’s total value. In addition, you may also need additional permits for things like plumbing, and electrical work.
Copyright, Trademark, and Patent Registration Fees
In Australia, businesses must register their trademark, copyright, or patent online via IP Australia. The fees for doing so vary depending on the type of registration.
For example, registering a trademark costs thousands of dollars per class of goods or services. Moreover, the cost to register a copyright varies based on the work’s length.
Taxes, Insurance, and Security
The Australian government requires all businesses to pay taxes and fees. In addition to the standard GST (Goods & Services Tax), a business must pay payroll, land, and other state-specific taxes.
These can vary depending on the industry in which you operate. For example, if your business is in online retail, you will need to register accordingly.
Moreover, if your business is based in Melbourne or Sydney, additional costs will be associated with land rent and security deposits for retail space or offices. To ensure you will have sufficient financing for your project, we recommend hiring a commercial mortgage broker or applying for commercial investment loans.
Depending on your industry, you may need to purchase software or subscriptions for accounting, payroll management, and other purposes. If your business has employees, they will also require access to certain software programs such as Microsoft Office 365.
Software subscriptions are usually recurring, so you may need to budget for this cost annually. You can also reduce the number of software you use by automating certain processes with third-party apps or cloud-based services.
Office Equipment and Supplies
In addition, it is also necessary to determine whether you will need to purchase office supplies, such as pens and paper, printer ink, and toner cartridges. Furthermore, budgeting for furniture may also be required.
This includes desks, chairs, filing cabinets, and more. We also recommend considering the cost of office furniture in your start-up budget.
This can be a big expense, particularly if you purchase new furniture for every employee in your company. However, renting furniture is also a good option because it can save you money over time and help with space constraints.
Accounting and Bookkeeping Cost
A bookkeeper or accountant ensures that your financial records are accurate and that you pay the proper taxes on all income.
Having an accountant on staff can also ensure that the money you pay your employees is properly accounted for and that they have accurate W2 forms at tax time.
Different legal issues may arise depending on the type of business you operate. For example, you may need permission from the city to operate certain types of businesses in specific areas. So, it is best to include the legal fees in your business expense estimation. This will avoid any last-minute expenses and keep your budget structured.
Budgeting for a commercial project can be challenging, especially if it’s your first time. Plan and think through your expenses before starting the project. In turn, doing so will help to ensure you avoid any unexpected costs later on.
By taking this approach, you can ensure that your project will be completed on time—and within budget.