Even if e-commerce is taking over brick-and-mortars now, traditional businesses will never go out of fashion. When we finally beat the pandemic, people will revisit malls and movie theaters. In fact, they are already starting to, thanks to the vaccines.

As such, your company is probably preparing to build its first commercial facility. Whether you plan to build a skyscraper, a mall, or a small commercial hub, the property will be subject to the same rules and processes. Construction won’t begin right after the designing process. You’ll go through several stages of planning, financing, and bidding before groundbreaking can commence.

With that in mind, here’s everything you need to know before starting a commercial building project:

1. It starts with planning and development.

As with any business project, planning is the first step to constructing a commercial building. This is where you’ll list down your goals, design the building, and set a budget.

The ideal process should go as follows:

  • Choosing an ideal location
  • Setting a budget
  • Pre-designing
  • Hiring a contractor
  • Holding consultations with your team

The building’s pre-design isn’t meant to be its final design. It is subject to changes depending on your goals and those of the developer. Your budget matters, too. During this stage, the developer will scout for contractors who will take on the project and study the feasibility of the building’s design.

For the developer to find contractors, your company should make a request for proposals (RFP). You can do it through software that can create an effective engineering request for proposals. The RFP is a business document that announces a project and encourages bids from contractors. Basically, it helps contractors find jobs while it allows you to evaluate the feasibility of the bids so that you can choose the best contractor for the project.

The RFP should include a description of your company, the scope of the project, and the criteria for evaluating bids. It should also outline the bidding process and contract terms. In addition, it should clearly state the tasks that will be undertaken by the winning bidder and the time frame.

man reviewing bids

2. You will review several bids.

After issuing your RFP, expect to deal with an influx of bids. The bidders will send a proposal, which typically includes the following:

  • An executive summary of why you should hire the contractor
  • The benefits you will gain from hiring the contractor and the services they render
  • The costs, which covers labor, materials, and equipment
  • A timeline describing each stage of the construction
  • References to previous projects and clients, including names and addresses
  • Profile or resume of the team members, which includes electricians, painters, plumbers, and other key personnel

The winning bid must show why the contractor is a good fit for the project. They don’t necessarily have to be the most popular or cheapest company. What they could contribute, and how, is more important. For example, if the site is a remote location, the bidder should be capable of traveling to that area without issues. They shouldn’t have problems committing laborers and other key personnel to the project.

Transparency is crucial as well. The winning bidder should itemize every material they’ll use, as well as the cost of each one. Contractors usually add 10% to 15% to the costs to account for waste, which you must see from their proposal. The contractor should clarify if they will obtain the materials themselves or expect you to get them. The latter may help you cut down costs, but it won’t repel a good contractor.

3. You will complete a lengthy pre-construction phase.

The project won’t immediately start after you hire a contractor. You still need to obtain building permits, which won’t be granted to you if the project fails to follow building codes. Hence, show the pre-designed building to your contractor immediately because they will know if it follows the code or not. This will save you time and costs.

After obtaining a permit, you need to get the building insured. This protects everyone working on the project in case an incident occurs, like a construction accident. The insurance policy should include a builder’s risk insurance, worker’s compensation, and general liability.

Next, your contractor will start procuring the materials for the project. They’ll also round up the services and manpower needed. If the project is huge, they usually hire subcontractors. Examples of subcontractors are glass installers, woodworkers, concrete suppliers, and cladding suppliers. Like contractors, they will also make a bid before partaking in the project.

The construction phase will only begin once these stages are completed. So set a realistic timeline for your project. Start planning years in advance, then collect bids at least a year before the construction. With enough elbow room, the project can proceed with minimal setbacks.

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