Renovations are complicated. It is quite likely that even the most organized, diligent entrepreneurs will experience delays during renovations to an existing business or when making leasehold changes to start a new venture.We’ve all watched the home renovation shows where the budget is pushed well past the limit when the contractor finds an unexpected problem hidden behind the wall. While never good for the home owner, it can be doubly challenging for the business owner who is making fewer or no sales while the renovations are underway. In the meantime, she still has to cover rent, payroll, loan payments, etc. These delays don’t just negatively impact your cash flow, they are a real test of your patience, sleep patterns and peace of mind.
While it may not be possible to make the renovation process completely painless, here are some tips to smooth it out:
- Get at least three quotes for contractors and check their references. In addition, check out the contractor and the firm on the BBB site http://www.bbb.org/manitoba/ and the Manitoba court sitehttp://www.jus.gov.mb.ca/
- You’ve set a budget for your renovations, now increase it! It is suggested that you include an extra 10% of construction costs to cover unexpected renovations; add another 10% of construction costs for changes you might make during the renovation process (it is very common to change your mind during the building); and a final 10% for additional design and planning work.
- Projects often take longer than anticipated. Double the amount of time you think the renovations will take, as chances are your contractor will experience delays, construction supplies will take longer than anticipated to arrive, and you have to factor in time for inspectors to provide their feedback.
- Borrow more for renovations than you think you’ll need. If you don’t end up requiring the extra funds, you don’t need to access them. If you do need it, you can sleep comfortably knowing the funds are in place.
- If you are ordering new equipment, be sure to include the shipping, taxes, and installation costs. There may also be training costs associated with the new equipment. It’s never good to get a bill that is much larger than you anticipated.
- If a major issue develops during the renovation, assess whether it needs to be addressed immediately or if it could be done later. You won’t want to interrupt the operation of your business later but addressing it now may cause significant delays.
Just when you think you are ready to get down to the business of running your business, there may be more delays. New business owners often find that sales of their product or service don’t materialize as quickly as they anticipated.
The moral of this story: be conservative! Renovations take longer and are often more expensive than expected; and sales projections can cover a wide range. As you plan, do your best to incorporate all the ‘what if’ scenarios in an effort to keep nasty surprises at bay.
– Heather Stephens