By Tom Sheehan
From the August 2021 Issue
As stores, restaurants, and other public-facing businesses reopened after a year of COVID-related closures, many business owners are prioritizing the customer experience by keeping the front of the house running as safely and smoothly as possible. At the same time, every facility executive understands that controlling back of house operations is critical to the financial viability of an organization.
While seeking to reduce the cost of facility maintenance related items might seem like a good way to save money in the short term, it can cost in the long run. Investing in preventive maintenance plans, identifying hidden operating costs, and engaging facility services providers are three ways to keep retail facilities in top shape, which supports the core operation and helps drive profitability.
Whether operating a national chain or an independent business, effective building management starts with a realistic operating budget. Regardless of the size of the business, it’s important to proactively evaluate occupancy expenses such as rent, utilities, contractor labor, and waste management. When establishing your operating budget for the coming year, allocate enough money to cover preventive maintenance and set aside a reserve for unexpected expenses.
Providing your facility with quality waste and recycling, HVAC, and other services may be costly, but they are required expenses for effective operation. Maintaining plumbing, electrical, and temperature control systems does require an upfront investment, but preventive maintenance can head off expensive emergency repairs.
In some cases, building maintenance can even generate income. Recycling waste might cost more than sending it to landfill, but you can offset costs by reselling recyclable commodities on the secondary market. Recycling can also help to establish your organization’s reputation as an eco-friendly enterprise.
Partnering with a vendor for facility maintenance offers a number of advantages, particularly if you bundle services. Full-service facility vendors provide economies of scale by coordinating multiple site services, offering consolidated billing, and ensuring the best rates with major service providers such as waste and recycling, mechanical, electrical, and plumbing contractors.
Whether you’re looking for new equipment or designing a waste management program, an experienced vendor who deals with operating issues daily can analyze your needs and local market conditions to provide the best value. Full service providers can also generate sustainability reports and other conveniences, like electronic billing.
When you engage a facility services provider, it is important to review service agreements to avoid hidden costs. How does the vendor calculate its rates? Can they raise their prices at a moment’s notice? Does your plan roll over? To avoid being locked into a contract with a provider that no longer meets your needs, be vigilant about terms and conditions. When in doubt, retain an attorney to review your contracts.
Keeping an eye on your invoices is also critical. Some companies may apply fuel charges and environmental fees as a mechanism to avoid raising the base monthly rate. Ultimately, there could be as many as 10 to 12 different line items throughout an invoice or buried at the bottom of the bill.
When selecting a vendor, consider the size of your business. Large chains prefer to work with a vendor that has a national footprint, while smaller operators tend toward a local vendor relationship. As part of your due diligence, check company references and contact trade organizations and local business associations. You’ll also want to check going rates in your area.
Partnering with a facility service provider, investing in preventive maintenance, and identifying hidden costs help retail facility managers save time and money in back-end operations. Optimizing facility services helps to create spaces that benefit tenants, customers, and employees alike—contributing to the success and profitability of the retail operation.
Sheehan is vice president of REIT Services at RWS Facility Services. He specializes in assisting property management firms manage their waste and recycling programs
Do you have a comment? Share your thoughts in the Comments section below, or send an e-mail to the Editor at [email protected]m.