5 Overlooked Costs when Budgeting a New Laundry Project

Once again, it’s April 15th – Tax Day, our annual reminder of the importance of fiscal accuracy, proper budgeting, and sound financial forecasting for tax planning. Coincidentally, April 15th is also National Laundry Day. If you’re considering building a new laundry or expanding your current facility, fiscal accuracy, proper budgeting, and sound financial forecasting are just as critical. We completed our first laundry project in 2005 and have designed and built over 200 laundries since then. During that time, we’ve learned a thing or two about costs, budgets, and planning. So, in honor of Tax Day and National Laundry Day, we’re highlighting five costs companies often miss when planning their new laundry project.

Utility Impact Fees

Most municipalities require you to pay utility impact fees before beginning construction.  These fees are assessed due to the laundry’s “impact” on the local water supply, sewage treatment system, or other utility infrastructure.  Utility impact fees can be thousands or even millions of dollars per project.  Don’t forget to fully research these costs before finalizing your project budget.

Special Construction Taxes

Construction taxes are not as common as impact fees, but they can definitely impact your project budget.  For example, Texas has a construction remodel tax that is assessed if you’re remodeling an existing building, and Mississippi has a tax on all new construction.  Just like impact fees, you need to do your research to make sure state and local construction taxes are considered in your final numbers.

Site Preparation

Some sites require a great deal of preparation before you can start building.  For example, a site may be heavily wooded, wet, and have poor soil conditions.  In this case, you will need to clear the site, import soil to raise it above the local flood plain, and improve the soil bearing capacity using engineered fill, pilings, piers, or some other option.  All of this adds significant time and cost to the overall project.

Project Contingency

No project goes exactly as planned.  There are unexpected challenges – delays, scope changes, unforeseen conditions.  Project contingency provides a mechanism to absorb these bumps and stay on course.  So, make sure you include a project contingency.

Required Code Upgrades

If you decide to convert an existing building into a new laundry or expand your current facility, you will need to pull a building permit.  And when you pull that permit, the building department may require upgrades to the existing building such as ADA accessible restrooms, an ADA compliant building entrance, additional parking spaces, on-site storm water retention, and other items to meet current code requirements.  These code upgrades are often overlooked and can add up quickly so make sure you’ve including these costs in your overall budget.

There are a lot of moving pieces to consider when building a new laundry.  And often, the costs associated with impact fees or special construction taxes can get missed. To avoid unplanned surprises like these, opt for a construction partner with laundry experience and expertise, a partner who will provide a comprehensive project cost upfront, and one who will deliver as promised so you can focus on servicing your customers, taking care of your employees, and paying your taxes.