Cost planning is sometimes referred to as Elemental Cost Planning. It relies upon the adoption of a Standard Form of Cost Analysis for buildings which allows costs to be compared on a common format. This forms the basis of the benchmarking analysis central to the concept of Elemental Cost Plans. It can be divided into several estimates and solves two problems: how much to build and how to spend money to achieve the best result.
Property developers are paying more and more attention to their total budget or financial limit as they realize without this, any design becomes useless and nothing is gained in the end. Therefore, cost planning is applied as ‘designing to a cost’ or ‘target cost planning’ since a cost limit is fixed for the scheme and the architect must then prepare a design that will not exceed this cost.
Cost planning is a procedure from the concept to completion at the construction site, containing several staged estimates, including brief stage (indicative) cost estimate; outline proposal (preliminary) cost estimate; sketch design cost estimate; tender (construction drawings) cost estimate, etc. All estimates are developed step-by-step as the design moves forward.