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By Dave Clifton
Small businesses don’t typically have huge budgets. Yet, they’re still burdened with the same costs as larger, more established companies. This is especially evident when it comes to facilities. Regardless of the size of the company, a lease costs the same. This often locks small businesses out of certain areas or restricts them to specific square footages. As a result, many small businesses need to make the most of what they have. Thus, SMB space utilization becomes an extremely important focus.
The ability of a small business to manage its space efficiently unlocks a slew of possibilities for growth. From cost savings to better productivity, small businesses with good utilization ratios will find more opportunities to maximize ROI.
The key to SMB space utilization is a focus on recognizing the need for space and allocating appropriately within facilities. It’s a dynamic process that can change frequently for growing SMBs—as often as operations demand it. Here’s what facility managers need to know about utilizing space at a growing small business.
What is small and midsize business (SMB) space utilization?
Space utilization is the ability of an SMB to use a given space efficiently. This is an imperative concept when you only have so much of it. The space you’re paying for needs to support company goals and the people working diligently to achieve them.
The measure of space utilization is simple: divide the number of hours of use by the total available hours of a space. For example, if you have a meeting room that’s available 10 hours a day, five days a week, 50 would be your denominator (total hours). If, in a given week, employees use the space for a combined 25 hours, the formula would be: 25/50=50%. Understanding utilization rates for various areas of the facilities or the workplace as a whole helps businesses understand the value of the space they’re paying for.
For small businesses, utilization yields important insights. How well are you utilizing space you’re paying for? What types of spaces see more use than others? What opportunities are there for better use of space? Small businesses can put these insights to work and reap the many benefits that come with good space utilization.
The benefits of space utilization for SMBs
SMB space utilization is both a metric and a mission. Understanding space utilization paves the way for pursuit of better values, which forces a growing small business to constantly evaluate its efficiency. Striving for better utilization and monitoring those efforts unlocks a world of potential for SMBs:
- More efficient use of facilities, from both cost and operations standpoints
- Better understanding of space allocation and utilization
- Purposeful allocation of space to support the needs of employees
- Context for broader facilities data such as utilization and occupancy
- Insights and opportunities to repurpose or reallocate space
- Smarter spatial layout of facilities, to streamline accessibility
Space utilization benefits spill over into other aspects of business operations. For example, giving employees the spaces they need/want will increase utilization, as well as productivity. Likewise, identifying poor utilization can lead to cost savings or top-line growth when that space is put to work more effectively. SMBs that put utilization data to work will find themselves better-positioned to thrive while remaining lean.
How can SMB space utilization software help?
While small businesses operate on stringent budgets, there are some investments too essential not to make. Space utilization software is among them. SMBs using facilities as a foundation for growth need the space utilization insights that come from robust software.
Software effectively provides the data used for facility-related decision-making. It enables the collection and aggregation of utilization information, and provides dashboard context that makes identifying patterns and trends simple. Administrators can easily see where utilization is too high or low, what types of spaces see the most use, peak utilization times, and more. It all folds into a contextual understanding of facilities and the power to drive better decisions about how to shape the workplace.
Though it comes with a cost, SMB space utilization software is a cost-management tool as much as an optimization resource. In shaping facilities with better space utilization rates, SMBs control lease costs and improve workplace ROI. It’s an opportunity to stay lean, yet enable growth.
Space utilization helps small business measure efficiency
Small businesses succeed when they’re able to stay lean and grow sustainably. Efficiency is key in everything, including space utilization. Utilization itself is an efficiency metric—one that’s relevant to the business’ largest cost center: facilities. Maximizing the ROI of facilities brings benefit to various aspects of small business operations, including its growth prospects.
A small business that prioritizes space utilization is one that’ll make the most of facilities and the opportunities that come with them. Because facilities touch every part of the business, efficiency here expounds to efficiency elsewhere. SMBs can ride that efficiency to growth, prosperity, and new opportunities—even when it comes time to relocate to newer, larger facilities.
Keep reading: SMB Stack Planning