Procedure of Preparing Cost Plan

Clients who are interested in commissioning large building projects were increasingly cost conscious, industrialists concerned with profitability, government bodies concerned with accountability. Therefore there is a need to know the cost of a building before they started work on it. Clients can be classified into three categories: Clients who have a clear intention of their building requirements, but are generally unaware of cost implications, Clients who have a maximum amount of money to spend and a project in mind but are unaware of what that amount of money will purchase, and Clients who know their building requirements and who also have a fixed sum of money to spent on the project (Ashworth, 1999).

Cost planning is a statement of how the design team proposes to distribute the available money among the elements of the building and also a method of providing cost data which will assist the architect in making decision. With the invention of cost planning technique various problems were overcome by the construction industry and effectiveness is achieved and cost is controlled throughout the project.

This report explains to a client about the purpose of cost planning, information required to prepare a cost plan for the proposed project, things to be considered in selecting proper information, adjustments to be made with the available information, assumptions to be taken, and how to arrive with an estimated cost for each element of the proposed project.

This report will help to a reader to gather knowledge on cost planning, cost planning techniques, the use of it, and how effectively it can be used in a construction project.