Plan Review Delays Impact - Building Owners

Business Owners assure adequate funding for the project to be paid in a timely manner. And part of this task is to arrange reserve funding for the inevitable problems. Business Owners do some serious research -- including an analysis of their market -- to determine projected sales volume and anticipated expenses.

Long before there is a contractor, the owner makes what may be the most vital decisions on the typical construction project: what contractor, designer, CPA, attorney, real estate broker, engineer, bank officer, etc. to utilize. Most often, the owner selects an attorney or contractor and those people have a group of experts they often work with. More important than the job itself is the right mix of people to work on the project AND the constant supervision of the group of professionals to make sure that all tasks are being completed and that they are working well together.

Opening delays hurt bottom line. Paying several entities on top of losing several months of business could be devastating.

Although the designer normally researches and prepares recommendations for technical matters relating to the design, when involving quality, cost and/or time, these corrections, changes, and interpretations are communicated to the owner who often controls the final disposition on the matter.

Senario: A business owner obtains a 5-Year term and 6% interest construction loan to pay for the project (10,000 ft2 new building) and for a working capital that cover a substantial costs to bridge the time between making expenditures and obtaining revenues (Extra 25% of the fair market cost of the structure). Unfortunately he/she experiances a 3-months delay during the permitting phase.

This delay impact calculator will help you determine the impact value on your bottom-line. To analyze the impact of plan review delays on the net cash flow of the 1st year projected revenues, Please provide the following information and click "Next". To auto populate, click Default:

Permitting, Bank, Profissional Services

Structure square footage:
Cost per square feet ($/sf):
Exclude the purchase price of the land or existing structure
Building construction cost ($):
Working capital amount ($)
25% of the fair market cost of the structure.
Total loan amount ($):
Construction loan monthly amount ($)
5 Years 6% construction loan.

Business Projections

Total professional services cost ($):
This is the architecture, engineering, consulting, permitting, project management and legal expenses
Monthly fixed operation cost ($):
This is the fixed costs (sometimes called "overhead") of which don't vary much from month to month. It include services, insurance, utilities, and other set expenses, etc. It's also a good idea to throw a little extra, say 10%, to cover miscellaneous expenses that you can't predict.
Total Monthly fixed cost ($):
This is your monthly loan obligations and the monthly fixed operation cost
Average gross profit percentage (%):
This percentage tells you how much of each dollar of sales income is gross profit. To calculate your average gross profit percentage, divide your average gross profit figure by the average selling price. For example, if Mr. Smith makes an average gross profit of $200 on a product that he sells for an average of $300, his gross profit percentage is 66.7% ($200 divided by $300).
Monthly Break-even Sales ($):
Calculating Your Break-Even Point: divide your estimated annual fixed costs by your gross profit percentage to determine the amount of sales revenue you'll need to bring in just to break even.
Monthly Gross Sales ($):
This is the total dollars from sales activity that you bring into your business each month. In order to break-even, you must base your forecast on the volume of business you really expect -- not on how much you need to make a good profit.

Construction Duration, and Plan Review Delay

Construction duration (months):
Plan review delays (months):

Disclaimer: While the analysis obtained is believed to be correct, OptaSoft assumes no responsibility or liability for its accuracy. The analysis presented in this page should not be used or relied upon for any specific application without competent examination and verification of its accuracy, suitability and applicability by licensed professionals. OptaSoft does not intend that the use of this report replace the sound judgment of such competent professionals, having experience and knowledge in the field of practice, nor to substitute for the standard of care required of such professionals in interpreting and applying the results of the generated report provided by this software. Users of the information from this software assume all liability arising from such use.