Facilities Management Budget Planning Tips
By Dana Sher
Head of Product
One of the most difficult tasks for any facilities manager is budget planning and management. Trying to account for workplace expenses can seem like an insurmountable job. Nevertheless, it’s one you’ll have to face head-on. Here are a few tips to conquer budget issues:
1. Look at costs
Understanding how to budget for facility management starts with understanding the various costs of running your workplace. Everything from maintenance costs to expenses for routine maintenance throughout affect how much you spend above and beyond your lease.
Fixed and known costs
Start by tabulating your fixed costs. For example, if you know you pay $12,000 per year for landscaping, you can budget this as a fixed cost. Likewise, if you have access to pricing from vendors and partners for products and services to be purchased in the year ahead, budget those as known costs.
Unknown and unexpected costs
What’s harder to plan for are unforeseen costs. There are a few ways to make the unexpected more predictable. Use historical data for things like routine maintenance costs. Depending on the quality of your records, you can also look at costs from years past and match those to expenditures you may face.
One-off and seasonal costs
It’s a good idea to break down costs on a monthly, quarterly, and annual basis. This will help highlight overlooked costs, such as seasonal facility fees. For example, you may pay more for utilities in the winter and more for landscaping in the summer. Similarly, if you want to plan a renovation in the spring, you’ll be able to more easily account for those costs when your budget is broken down.
2. Look at trends
You may not have a crystal ball for telling the future, but if you’re up on workplace trends, it could be the next best thing. One of the best budgeting tips for facilities managers is looking closely at workplace and facility management trends and budgeting for them.
Will you be making any changes to your physical workplace layout this year? If so, you’ll need to budget for each part of the project. Expanding your office IoT this year? Accounting for the integration costs should be the focal point.
Everything outside the normal scope of day-to-day facilities management will come at a cost. The key to building an inclusive budget is planning.
3. Look at the little things
Your facility management budget is complex, but that doesn’t mean it should be convoluted. Just like integrated facilities management is a rising trend, integrated budgeting is also important. This means budgeting for your facilities through different lenses.
Take your facilities management budget and break it into individual segments. Look at costs for running each part of your facility, then build a strategy to make the most of those dollars. For example, buying lightbulbs may seem simple. But is that ongoing cost more than researching a more-efficient lighting solution? Forcing yourself to budget at scale also forces you to think about the cumulative elements of your workplace.
4. Build in a buffer
Even the best budget is one unforeseen cost away from being busted. That is, of course, you build in a buffer.
First, take the sub-budgets that comprise your overall facilities budget and build in dollars for miscellaneous expenses. This will give you some wiggle room at a more subtle level. For example, if you’re under budget in one area and over budget in another, a simple transfer can balance things out.
Alternatively, you can pad the top of your budget with one lump sum for general, unexpected expenses. This tactic provides a lump sum to work with later on.
5. Sell it to the C-suite
Perhaps the hardest part of budgeting for facilities management is selling it to executives. Illustrate value wherever possible and justify expenses with benefits. If you’ve taken the time to budget well and responsibly account for contingencies, you won’t have to defend your budget so much as explain it. Draw connections from your budget to the impact they have on the workplace and stand by your costs and figures.
Budgeting is never easy, no matter what line of work you’re in. For facilities managers, there’s a lot to consider and a lot that’s unknown. The more you account for your variables, recognize trends, and build in a buffer, the more comfortable you’ll feel in your final budget. Note: make sure to double-check numbers.
Read next, how to select the right facility management software.