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How to create a defensible capital and maintenance budget for the coming year

Eyes on the Future

As we’re approaching the 4th quarter, it’s time to look ahead to 2020 and begin planning your roofing, building envelope, parking structure, and pavement projects for next year. We are all hoping for a successful next year of projects, but in order to do that we need to ensure we are focused on the highest priority projects and submitting/securing accurate budgets in the first place.

One of the biggest challenges in planning next year’s capital and maintenance budgets is identifying and prioritizing the actual needs of your facility and your organization. In order to create a defensible budget, facility managers need to do better than “guesstimating” – your CFO expects concrete, accurate data to drive spending decisions.

You may be asking yourself “What’s the best way to create a defensible capital and maintenance budget and solidify the funding I need?” The budgeting process is so much more than the paperwork you fill out – that’s just one step in the entire, intricate process. In our 28 years of helping facility managers with planning their roof, wall, parking structure, and pavement projects, we’ve found that there are 5 crucial steps to getting your capital and maintenance budgets approved.

 

The 5 Step Process

1. Establish and Develop the Right Relationships
Your relationship with your CFO (and other key financial decision makers) will greatly influence your credibility. Find out what their business objectives are and figure out how your department impacts those objectives.

2. Gather Data and Identify Needs
NOW is the time to survey your facility’s roofs, walls, parking structures, and pavement! Properly documenting current conditions and determining deficiencies will not only help you determine what needs to be fixed, but will also give credibility to your budgeting proposal.

3. Devise a Solution
Compile and analyze the data gathered in Step 2 to form a prioritized program that encompasses current facility conditions, replacement values, remaining useful life, and risk evaluation in order to develop a long-range asset management plan that will align your facility’s goals with your organization’s strategic objectives. In order to properly allocate funds and mitigate risk, careful planning is needed in this step.

4. Present Your Case
In order to understand your CFO, you need to think like a CFO. Find out what metrics they are used to seeing and use them in your proposal. Instead of “presenting” your budget proposal, explain how your information will impact their business unit’s financial measures in terms they recognize and understand. Successful pitching to C-suite executives involves being familiar with their decision-making needs and showing how your solution aligns with their objectives. It’s also useful to distinguish if the project in question will produce savings, reduce expenses, or mitigate risk.

5. Keep Track of Results
Measure the results of your efforts and translate it into financial metrics. Analyzing and tracking results like this will strengthen your credibility with your CFO and will help with the budgeting process for years to come.

 

Get the Data You Need To Get Your Budgets Approved

StructureTec’s Data Management Services (DMS) division puts the tools in your hands to develop accurate, prioritized budgets based on your unique facility needs. By creating a Long-Range Asset Management Program based on accurate condition analysis, you (and your CFO) can be confident you are utilizing your 2020 capital and maintenance dollars efficiently and effectively. This personalized program is designed to save you two things: time and money.

By accurately forecasting yearly budgets, we give you an actionable plan for maintenance and significantly lower your future remediation and reconstruction costs. To see how StructureTec can prepare you for your roofing, pavement, and building envelope projects for 2020 (and beyond), contact us today!