In Working Order: Maintenance Investments Pay Big Returns

January 20, 2016
B&I Blog
Blog

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January 2016

Nearly all businesses—from corporate offices to manufacturing plants to retail outlets—occupy physical spaces that require regular upkeep to meet the needs of daily operations. Maintenance, repair, and operations (MRO), therefore, is vital for business success. Problems like a leaky roof or broken air conditioning can restrict your ability to do business for hours or days and can cost thousands of dollars to replace.

While the size and scope of your business will determine your specific maintenance needs (a manufacturer with warehouses versus an office-based legal firm, or a large retail chain versus a mom-and-pop shop), the goal is the same. All businesses need to know when and where to invest in proactive, ongoing maintenance in order to avoid the headaches that accompany huge repair costs.

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Apply Sunscreen:

Consider placing “solar screens” or “solar films” over glass with western exposure to save on cooling costs during the summer months. (Get more energy efficiency tips from the U.S. Small Business Administration.)
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Budgeting for MRO

Budgeting for MRO presents a challenge for many businesses. Facilities teams at larger companies may need to demonstrate the return on investment for their activities, while smaller businesses may not have experience predicting maintenance needs. In both cases, existing benchmarks can help.

According to annual data from the Building Owners and Managers Association International, repair and maintenance costs account for 16% of expenses in private sector office buildings on average. This represents the third-largest expense category for building operations, following fixed expenses and utilities. Another study commissioned by the Association of Packaging and Processing Technologies estimates that preventive maintenance accounts for between 30% and 50% of maintenance and repair costs, or anywhere from 4.5% to 7.5% of annual operating expenses.

Your industry may also dictate how much your business budgets for MRO. The Restaurant Facility Management Association reports that the food industry typically budgets 1% to 3% of sales for maintenance and repairs. Along the same lines, a benchmarking report from the Professional Retail Store Maintenance Association indicates that retailers spend an average $5.02 per square foot on store maintenance, with HVAC being the largest expense for 43% of respondents.

Go with the Flow:

Conserve water and save money by using water-saving faucets, toilets, urinals, and showerheads. (Get more energy efficiency tips from the U.S. Small Business Administration.)

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Developing a Maintenance Plan

Before creating a budget for maintenance and repair, you need to determine which parts of your facility or office you need to maintain. The answer once again varies depending on business size and type. To guide you, Buildings.com provides a helpful checklist for preventive maintenance that includes the following areas:

Roofing (semi-annual inspection, clear debris)
HVAC (seasonal inspections and tests, annual lubrication, quarterly filter replacement)
Plumbing (annual inspection, pump lubrication, periodic fire testing for water heaters)
Lighting (regularly scheduled inspection, group relamping, cleaning)

In addition to preventive maintenance, other MRO needs include custodial/janitorial services, pest control, snow removal, waste collection and disposal, grounds care and landscaping, fire protection services, and more. And these needs aren’t limited to businesses that own their properties. Many small business owners who rent property—especially in retail—have a triple net lease, which makes them responsible for maintenance and repairs.

Exit Strategy:

Switching to ENERGY STAR qualified exit signs can reduce maintenance by eliminating lamp replacement, as well produce up to $10 annually per sign in energy savings. (Get more energy efficiency tips from the U.S. Small Business Administration.)
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ROI for MRO

Working with a vendor, such as Innovatix contracted suppliers W.W. Grainger and HD Supply, can help businesses large and small get the most value from their investment in MRO. These suppliers feature products in such categories as electrical, floor and window coverings, HVAC, janitorial and cleaning, lighting, paint, safety and signage, and more. Large businesses benefit from the ability to choose from over a million industrial supply products on contract, while smaller businesses can enjoy handson service with no purchasing minimums. And all businesses will appreciate free freight on most purchases from W.W. Grainger, along with savings of up to 10% off of published prices.

An investment in MRO not only pays for itself but also produces a return for your business by extending the life of facilities and systems, and preventing business disruptions. It’s among the smartest investments a business can make.

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