Value engineering: how do we make a fit-out affordable without sacrificing quality?

Value engineering: how do we make a fit-out affordable without sacrificing quality?

There’s no denying that the price of fit-outs has increased in recent years. With new council requirements, the rising costs of materials and labour, and updated structural regulations, providers like us have to work extra hard to deliver quality fit-outs to tight budgets. 

So what do we do when we’re faced with a project that we’ve initially budgeted higher than what the client is willing to spend? We put our creative hats on and get value engineering. 

Engineering the most effective fit-out

Put simply, value engineering is about finding clever and creative ways to make a project cheaper without compromising on how it looks and feels. 

When a client of ours has only $450k to spend on a project for which we’ve estimated $600k, we get into our value engineering mindset. We look at how we can re-specify materials, utilise cheaper methods of construction, and vary which different subcontractors and suppliers we can use. It might mean purchasing fittings and furnishings from a local supplier as opposed to getting them imported, or even experimenting with achieving a certain look using different materials. Thanks to our in-house joinery team, we’ve managed to replicate things like expensive stone finishing with laminate or acrylic alternates, saving some of our clients a big chunk of their budget. 

It’s important to remember that value engineering isn’t just budget slashing or creating a cheap final product. It’s about getting creative to solve small problems that will make the fit-out that bit more affordable for the client – without sacrificing the quality and the look the client really loves. 

Balancing expectations

The reality is that with any fit-out, there are a lot of stakeholders involved. Whether leasing agents, property owners, designers, or the clients themselves, everyone has their own interests and involvement in any project. 

In our experience, leasing agents sometimes underestimate the budget a client will need to get a space fitted out. It might be because they’ve been informed incorrectly themselves, or they are trying to sweeten the deal… but when the project all of a sudden costs a significant amount more per square metre to work with, it can be complicated. Some agents may share square-metre rates that were entirely accurate two or three years ago – but are now 25% out of whack. And given the cost of fit-outs have increased exponentially over the last few years because of new council requirements, structural and seismic changes, and the rising costs of material and labour, those small misunderstandings can cause big problems. 

Designers also have their own expectations when it comes to fit-outs. By nature, they want to present a gold-plated space to the client – that’s what they are employed to do! However, often the designer’s dream fit-out isn’t aligned with a budget that fits the current construction costs, especially when things external to a fit-out are thrown in as well (such as council costs, fixtures, furniture, and equipment). Nowadays, we get some designers running their designs past us while in the initial phases to check where their thinking sits budget-wise, and how we can work together to get it within reason. That’s a great way to avoid having to re-think your budget later.

Being willing to adapt

Sure, re-pricing can be a time consuming task. But at Datum, we see value engineering as an important step to help our clients get what they need. 

To create positive relationships with clients, you have to be willing to go the extra mile. For a recent client, we did 14 revisions before we’d even started the build, cutting the budget by 25% so our client had complete peace of mind (although in general we try to avoid needing quite so many revisions!). While that might be a bit above average, you need to be prepared to adapt and make quick changes to appease those closest to the project. 

It can be a tricky balancing act at times, managing the budget whilst not compromising on the look and quality. When you factor in the project’s timeline and opening date as well, it’s an intimidating task. But these moments when we feel incredibly lucky to pull on the expertise of our team. All our experts, from office to factory, have insights into how things can be done more efficiently, what can be swapped out for something more affordable, and what can be altered to work better. That’s how we think outside the box and help our clients achieve the look and feel they need at the budget they have.

Here at Datum, we’re happy to work our magic with value engineering to ensure your project can fit your budget. If you’re a designer, project manager, or space owner needing a hand, get in touch!