Andy Sehremelis on Managing Construction Budgets From the Owner's Side

By Andy Sehremelis · October 30, 2026

Andy Sehremelis has approached commercial construction from two directions: as the founder of Parkcrest Construction, established in Chino in 1992, and as an owner and operator of restaurants, gas stations, express car washes and retail properties. From the owner's side, a construction budget is more than a contract price. It is a plan for every dollar required to turn a property into an operating business.

Andy Sehremelis on Building a Complete Budget

A complete owner's budget includes hard costs for construction, soft costs such as design, engineering, permits, testing and insurance, and the costs of furniture, fixtures and equipment. For an operating business, it also includes signage, technology systems, opening inventory, staff training and pre-opening expenses.

Owners who budget only for the construction contract are often surprised by the remaining categories. Listing every category at the start, even with preliminary figures, gives a more realistic picture of the total investment.

Andy Sehremelis on Contingency

Every commercial project carries uncertainty. Soil conditions, existing underground conditions on an older property, material price changes and design adjustments can all affect cost. A contingency allowance, held by the owner and tracked separately, provides a way to absorb those changes without disrupting the rest of the plan.

Contingency should be managed with discipline. It exists for genuine unknowns, not for optional upgrades added during construction. Tracking every draw against contingency keeps decision-makers aware of how much protection remains.

Andy Sehremelis on Design Decisions and Cost

The greatest opportunity to control cost occurs during design. Building size, structural system, finishes and equipment selections determine most of the final price. Once construction begins, changes become more expensive because they affect work already ordered or installed.

Involving builders early, during design development, helps owners understand the cost effect of their choices while alternatives are still available. A builder's perspective on materials, sequencing and constructability often identifies savings without reducing quality.

Andy Sehremelis on Tracking Costs During Construction

Owners should receive regular cost reports that compare the original budget, approved changes, committed costs and projected final cost for each category. Reviewing those reports monthly, alongside the schedule, allows problems to be identified while there is still time to respond.

Pay applications deserve careful review. Work billed should match work completed in the field, and retention and lien releases should be handled according to the contract.

Andy Sehremelis on Change Orders

Change orders are a normal part of construction, but they should be documented, priced and approved before work proceeds whenever possible. Each change should state its scope, cost and effect on the schedule. Unapproved field changes create disputes and make final costs difficult to predict.

Owners can limit change orders by completing design decisions before bidding and by resisting scope additions once the work is underway.

Andy Sehremelis on Bidding and Procurement

The way a project is bid influences its final cost. Complete drawings, a clear scope of work and a realistic schedule allow builders and subcontractors to price the work accurately. Incomplete documents tend to produce allowances and assumptions that later become change orders.

Owners should also consider the timing of procurement. Equipment with long lead times, such as electrical gear, refrigeration systems or car wash tunnel equipment, may need to be ordered early to protect the schedule. Ordering early can also reduce exposure to price changes during construction.

Andy Sehremelis on Closing Out the Budget

A project budget is not complete when the building opens. Final pay applications, retention, lien releases, warranty documentation and the resolution of any remaining punch list items all need to be settled. Owners who track these items carefully avoid unexpected costs months after opening.

Reviewing the final budget against the original plan also provides lessons for the next project. Categories that ran over or under budget show where estimates can be improved, and that knowledge strengthens future planning. Over many projects, this discipline becomes one of an owner's most valuable tools.

Andy Sehremelis on Budgeting for Operations

For an owner-operator, the construction budget connects directly to the operating budget. Durable finishes may cost more initially but reduce maintenance over years of operation. Efficient equipment may carry a higher purchase price but lower energy and repair expenses. Evaluating these choices over the life of the property, rather than on initial price alone, leads to better long-term results.

A well-managed budget is the product of clear planning, honest reporting and timely decisions. Owners who stay involved throughout the process are best positioned to deliver a finished property that serves the business it was built for.