Owning and operating a commercial property requires continuous attention towards cost control. Taking steps to keep expenses manageable help to safeguard your property’s intrinsic value, and targeted financial risk mitigation strategies are integral to your ability to remain cash positive. Consider implementing some of these practical methods for managing your commercial building effectively.
Protect Yourself Against Inflated Utility Expenses
If you typically consume a substantial amount of energy in your day-to-day operations, you are probably accustomed to seeing high utility bills month after month. However, you should be wary about excessively high electric bills continually. Likewise, big spikes in your usage might be a red flag that there is a problem that you need to investigate.
Utility management assistance could enable you to monitor your usage vigilantly and efficiently. A professional analysis may reveal errors in your utility provider’s readings or alert you to issues with equipment that is overdue for an upgrade. Companies that offer these specialized services empower their clients to mount meaningful challenges with utility providers and prompt them to take remedial action.
A formal audit can also yield insights on energy efficiency initiatives. It can pinpoint exactly what facets of your operations are consuming too much power and identify the right solutions to address them.
Don’t Forgo Capital Improvements
An outstanding capital improvement might not be a high priority when you are focused on affording basic operating costs. While it may seem as though structural deficiencies are likely to render a building unfit for use in the near future, you really can’t be positive about that. So long as you have unaddressed capital needs projects, your building is extremely vulnerable to extensive damage from major weather events.
It is also worth noting that failing to complete vital repairs could put you in a precarious position with insurers in the event that you need to initiate a claim against one of your commercial property and casualty policies. Carriers may have a reasonable basis for denying claims when insureds have been negligent about maintaining a property in good condition.
Furthermore, outstanding capital improvements might make it more difficult for you to get affordable insurance coverage. If a building’s condition creates a high, foreseeable risk of damage, carriers might justifiably determine that their risk exposure in insuring it is too great. Consequently, you could face higher premiums than you would otherwise have to pay if you had taken care of repairs and improvements in a timely manner.
Your operating budget should include a line item for deposits to a reserve account earmarked for building repairs. If you have to undertake a project with a large and costly scope of work such as a roof replacement, it may be wise to explore financing or lending opportunities. Using funding to facilitate important work may be preferable to delaying it.
Include an Integrated Pest Control Program in Your Maintenance Plan
When it comes to pest control, a preventative strategy is almost always the best way to combat pesky rodent and insect intruders. Regular extermination is usually less expensive and time consuming than the cost of eradicating an active infestation that has already grown to epic proportions.
Bear in mind that pests are more than just a nuisance. They can wreak serious damage. Rodents can chew away at wiring or HVAC ductwork. Some insects such as termites could even cause structure damage.
Establish a service contract with a reputable pest management company that has a large portfolio of commercial buildings. Companies that work with corporate clients and have extensive experience serving large buildings understand the sweeping differences between eliminating pests in commercial properties versus residential properties. A locally based company will also be familiar with the most common pests affecting properties in your area. Monthly treatments can fortify your building against rodents and insects.
Ultimately, be conscientious about creating room in your operating budget for essential maintenance activities. The expenditures that you make to keep a commercial property in excellent condition could spare you from having to contend with much greater costs further down the road.