With today’s rising construction costs, how do you operate with the lowest possible cost, at the earliest possible time?
Second-Guessing Construction Costs Can Do More Harm Than Good
Aspiring entrepreneurs looking to build businesses often overlook infrastructure costs in the picture. Oftentimes, fit-out costs or construction costs are typically second-guessed. Ultimately, doing so leads to errors in terms of financial projections and cash flow problems due to unforeseen costs. These factors add a burden on business owners operating with limited capital because they fail to account for these expenses, leaving them unable to strategize on fund allocation in the early stages of their business.
Construction costs are inevitable. No matter what happens, you will have to spend on it to launch your business. It is almost impossible to dictate a cap on construction expenses especially when the numbers have not been thought of thoroughly. But given a limited budget, how is it possible to work through it given the limited amount of time and other resources?
MVD: Efficient Use of Limited Resources
Through years of experience, I have created a concept called the MVD (Minimum Viable Design). Just as in any business, your MVP (Minimum Viable Product) allows you to jumpstart your business to allow revenue to start coming in. An MVD would be a design that would complement your MVP. Creating a plan that complements your MVP, will allow you to work with the lowest possible budget set so when the revenue streams start coming in, it would allow you to properly build on top of it, making efficient use of limited resources.
Long-Term Savings on Capex Through Proper Planning of your Minimum Viable Product
A scenario without proper planning would look like this: let’s say you have already spent PHP 3,000,000.00 on fit-out costs. Two years later, you may end up demolishing most of the work, for argument’s sake, worth PHP 2,000,000, two-thirds of the cost to accommodate expansion. You would end up throwing away PHP 2,000,000 because you will have to redo everything. With proper planning, this type of incident can be avoided, leaving you with more savings in the long run.
Expand Your Business Without a Major Overhaul
Just imagine an expansion project years into the future without proper planning and anticipation. This might require you to temporarily shut down your business to accommodate renovation works. By creating an MVD, this won’t be the case. Because everything is planned out, later phases in the project would require minimal work because everything is optimized phase-by-phase. The necessary provisions and stub-outs are all laid out from the start, allowing for easy expansion with less dirty work.
Make Maximum Use of Limited Capital Through an MVD
When you’re a startup, you’re likely to be limited in resources and capital. Your focus should be on getting your project to generate some form of return so that you’ll have the resources to build on and expand later on. Working to compliment your Minimum Viable Product, you are guaranteed that costs are all optimized and effective. When it comes to architecture and interiors, an MVD will allow you to focus on the most important things in your business and take advantage of what little budget you have.
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