Determining the Cost to Build a Shop: Complete Financial Picture

Every construction project has a budget that it needs to take care of. So, how much does it cost to construct a shop? The answer is essential, but a correct one is even more important. That’s because of the consequences of getting a false figure. If it is too high, it might discourage you from proceeding, which wouldn’t be fair. If it is too low, it might encourage you to start, only to end up stuck in the middle.

Fortunately, there’s a factual discussion on the cost of building a shop. So, keep reading to acquire the figures you need for the project.

1. Factors That Determine the Cost of Building a Shop

The cost of building a shop may differ from one instance to another. That’s usually due to various factors, including the following:

1.1. Building Materials

Did you know that building materials cost approximately 40% of the cost? Besides, the more building materials the project needs, the higher the prices get.

Some materials are also more expensive than others. For example, it is more costly to build wood-framed designs than metal outbuildings.

There are various building materials you will need for the construction. These include brick, framing, interior walls, concrete foundation, and steel. Other materials are HVAC, electrical fittings, plumbing, security systems, and lighting. Besides quantity, the quality of the materials can also make a huge difference.

1.2. Contractors

On the other hand, the cost of hiring a contractor can take up 14% of the entire budget. Expect an additional amount for mark-ups and indirect fees. In case you are wondering, the contractors’ services make them a necessary hire.

Contractors oversee a lot, from procuring services and materials to hiring people to work on the construction site. They are also responsible for utilities, permits, and the project’s final cleanup.

1.3. Industrial Equipment

It can take up to 8% of the construction budget. This amount includes purchases of equipment such as excavators, cherry pickers, and cranes.

1.4. Design

Besides a contractor, you will also need an architect. Architects come up with the design of the new shop, not forgetting the management of its construction process.

It is the architect who will choose the materials and finishes as well, and they are a great hire since they assist in using the available space well.

Hiring an architect is relatively expensive as they can take up to 17% of the budget. Nevertheless, the money an architect pockets depends on his project responsibilities. The more his duties are, the higher the chances of paying more for the services.

1.5. Permits

Most people make the mistake of not budgeting for the permits. One must admit that it can be misleading since permits require a significant amount of money to facilitate. The amount can be as high as 5% of your budget.

Since you are building a commercial building, the cost of the permit will depend on its size. After all, the fee is usually set for every square foot. The bigger the area, the costlier the permit.

1.6. Demolition

If you want to build a shop in an area with existing buildings, you should also budget for demolition. Again, this is an amount of money that depends on the area that you need to demolish. Demolishers charge per square foot most of the time.

Besides area, the type of materials will also determine how much you will spend on demolition. The same applies to the location, hence the need to factor these things in.

1.7. Parking Garage

A parking garage will come in handy if your shop serves many customers. The total cost depends on the size and number of anchors. This figure also determines the necessary space and, of course, the available one.

1.8. Labor

The labor cost depends on various factors, including the laborers’ profession, pay rates, and the period they will work on your construction project. The common ones include plumbers, structural engineers, masons, carpenters, excavators, electricians, and painters.

Choose Cost-Effective Materials and Methods

Michael Branover, the Business Development Director at Branover Contractors Inc., suggests cost-saving measures and strategies for budget-friendly shop construction:

“When constructing a shop, factors like building materials, labor costs, and permits significantly influence the overall budget. High-quality materials and skilled labor can increase expenses while obtaining permits adds to the cost.

To save money, consider using cost-effective building materials without compromising quality, negotiate labor costs, and streamline the permit process by ensuring compliance from the start.

Additionally, adopting prefabricated construction methods or repurposing existing structures can be cost-saving measures. It’s essential to carefully plan and budget each aspect of the project to control expenses and ensure financial feasibility.”

2. The Average Figures of the Cost of Building a Shop

I would like to reiterate that the price for building a shop can vary and is not a consistent value. That’s because of various factors, including the ones mentioned above. Let’s look at the average construction expenses for a shop tailored for different occasions

2.1. Estimating the Typical Expenses for Constructing a Shop and Other Outbuildings

• Garden room (500 SF) needs $2,500 – $15,000
• Guest house (600 SF) requires $50,000 – $70,000
• Outhouse (16 SF) uses $500 – $5,000 on average
• Pool house (300 SF) usually use $45,000 – $180,000
• The shed (100 SF) needs $1,000 – $3,000 if it is a prefab and $2,500 – $15,000 for a custom one
• Sunroom or conservatory (200 SF) needs $8,000 – $50,000 if suitable for up to 3 seasons or $20,000 – $80,000 for a 4-season one
• Playhouse can take up to $500 – $2,000 if you do it yourself (DIY) or more if you hire a profession

• Greenhouse of 500 SF costs between $2,500 and $15,000
• Storm shelter uses $3,500 – $15,000 for a capacity of between 4 and 12 people
• You can spend $4,000 – $15,000 for a custom playhouse
• Treehouse: A basic treehouse usually requires $4,000 – $15,000, and its high-end counterpart can use up to $10,000 – $60,000. If you choose a livable one, the average budget is between $80,000 and $300,000.
• Garage costs $20,000 – $50,000
• Office can use up to $20,000 – $50,000
• Workshop needs $20,000 – $50,000
• A barn of 600 SF costs between $15,000 and $60,000
• Bomb shelter of 200 to 400 SF costs $45,000 to $70,000

2.2. Custom Built vs. Prefab

If you are building a prefab outbuilding, the materials you need for every square foot cost between $10 and $30 on average. The corresponding labor costs are $10 to $20 per foot. So, the average cost of constructing a square foot of a prefab is between $20 and $50.

On the other hand, a custom build is relatively expensive, with its materials per foot costing $20 to $50. Labor gets even higher, ranging from $30 to $100 per square foot. So, on average, you need between $50 and $150 to complete a square foot.

2.3. Determining the Average Expenditure for Constructing a Shop Depending on Size

The size of the shop you want to build determines its cost. Here’s a summary of the average prices of different sizes.

• 10’x20′, which is 200 square feet, costs $4,000 – $10,000 for prefab and $10,000 – $30,000 for custom-built
• 16’x16′, which is 256 square feet, costs $5,100 – $12,800 for prefab and $12,800 – $38,400 for custom-built
• 20’x20′, which is 400 square feet, costs $8,000 – $20,000 for prefab and $20,000 – $60,000 for custom-built
• 24’x24′, which is 576 square feet, costs $11,500 – $28,800 for prefab and $28,800 – $86,400 for custom-built
• 20’x30′, which is 600 square feet, costs $12,000 – $30,000 for prefab and $30,000 – $90,000 for custom-built
• 30’x30′, which is 900 square feet, costs $18,000 – $45,000 for prefab and $45,000 – $135,000 for custom-built
• 30’x40′, which is 1,200 square feet, costs $24,000 – $60,000 for prefab and $60,000 – $180,000 for custom-built
• 36’x36′, which is 1,296 square feet, costs $25,900 – $64,800 for prefab and $64,800 – $194,400 for custom-built
• 30’x50′, which is 1,500 square feet, costs $30,000 – $75,000 for prefab and $75,000 – $225,000 for custom-built
• 40’x40′, which is 1,600 square feet, costs $32,000 – $80,000 for prefab and $80,000 – $240,000 for custom-built
• 30’x60′, which is 1,800 square feet, costs $36,000 – $90,000 for prefab and $90,000 – $270,000 for custom-built
• 36’x50′, which is 1,800 square feet, costs $36,000 – $90,000 for prefab and $90,000 – $270,000 for custom-built

Define Budget and Optimize Space Use

Mandy Murry, the Founder & CEO of Independent Hotel Consultant, explains some key considerations that business owners should keep in mind when working with architects to optimize shop design costs:

“The budget for the shop design project should be clearly defined and communicated to the architect from the beginning. This will help them create a design that fits within the allocated budget.

The efficient use of space is crucial in minimizing shop design costs. Architects should carefully consider and optimize the flow of customers, staff, and products within the shop layout.

This not only enhances the shopping experience but also reduces construction costs by minimizing unnecessary movements and creating an efficient use of space.

Another key consideration is the selection of materials. Building materials can greatly impact the overall cost of a shop design project. It’s important for business owners to communicate their budget and preferences for materials to the architect.

The architect can then suggest cost-effective alternatives or find ways to use the desired materials in a more economical way. The shop design process also influences overall cost through the level of customization. A highly customized design with unique features and elements will inevitably be more expensive than a standard, cookie-cutter design.

Business owners should carefully consider the balance between creating a unique and appealing shop design while also keeping costs in check.

Collaboration and communication between the architect and business owner are essential in optimizing shop design costs.

Regular meetings and updates should be scheduled to ensure that both parties are on the same page regarding budget, design, and timeline.

The architect can also provide cost-saving suggestions throughout the process based on their expertise and experience.”

Final Words

The above discussion has left no stone unturned regarding the cost of building a shop. Therefore, you have a rough idea of what to budget for if you consider such a project.

Interestingly, there are various factors affecting the cost of building a shop. The most common ones are the size and features. The bigger the shop, the higher you will most likely spend on the project and vice versa.

Guest Author: Saket Kumar

Last Updated on March 6, 2024 by Ananya_Sreen