As facility costs and labor shortages force managers to adjust their facility budgeting and planning, more are considering alternatives to an in-house facilities labor force.
Every day, we speak with CFOs, real estate developers, and real estate investment managers who are looking at ways to reduce their costs while still maintaining a high standard of quality. Consider the following:
- If inflation and labor shortages continue, will you need to find a way to cut back on expenses?
- Are you budgeting for 2023 right now and need to reduce your operating costs?
If you haven’t already considered outsourcing services, like property management and facility services, we prepared an e-guide on the financial advantages of outsourcing.
Download the Outsourcing Guide
This blog post will focus on the next step after outsourcing these services: bundling your property management tasks and facility services. We’ll explain what bundling means, how it can help you achieve a lower budget while not sacrificing quality, and tips for choosing a vendor that offers bundled services.
What Does It Mean to “Bundle” Your Services?
Bundling is a term that can apply to various industries. It is when companies combine two or more goods or services as a single offering, usually to reduce the price they charge customers than if each good or service was purchased separately.
Suppose you were buying a car, for example. In that case, a dealer might bundle optional components into a package to simplify the buying process and encourage you to purchase additional options at a reduced rate.
Full-service providers may offer owners and managers the opportunity to bundle a wide range of services to help them save money and increase the number of services they provide to them. Think of all the different services required to keep a property running and looking great:
- Property management services
- Janitorial services
- Pressure washing
- Landscaping services
- On-call 24/7 repairs
If you outsource these services, you might have multiple vendors under contract. With janitorial services alone, you could have one company doing the nightly cleaning while another company handles disinfecting the building. Bundling would allow you to streamline these services, potentially saving money and contractual headaches working with multiple vendors to carry out critical services.
How to Set a Facilities Budget
If your organization has experienced a loss in revenue because of inflation or the pandemic, it makes complete sense if you are looking for ways to cut costs. But there’s a catch.
Even if it could be good for the short-term to cut services, it could significantly impact your operations and even your organization’s survival.
Keep This in Mind
Cleanliness and sanitation will be at the forefront of many people’s minds for some time because of the pandemic. If someone enters your facility or property and senses that it’s not clean, they will have a negative view of your organization. And if there is an outbreak in your facility or property, you might have to shut down until the area is disinfected.
Did You Know?
- Cleaning budgets have been cut by as much as 20% over the past two decades.
- In 2001, they were cut to increase security initiatives.
- In 2008, they were cut again in response to the Great Recession.
Source: CleanLink
How Do I Know What Is the Right Amount to Spend on Facility Services?
This is not to say that you shouldn’t cut your facility services budget if you have experienced significant losses or changed your business operations. For example, if much of your staff is now remote permanently, you probably don’t need the same level of maintenance services on a day-to-day basis as you did when hundreds of people were in the building at the same time.
On the other hand, you may have to allocate more towards one service, like disinfecting, than you previously did to keep everyone safe.
The critical thing to remember is that the best decisions are made when you have a good set of data and information you can review.
Blindly slashing your facility services budget could do irreparable harm to your organization. It’s important not to overreact and let data and reason help you determine what you need in the upcoming year.
You could also speak with consultants in facility services and property management to get recommendations based on their expertise. Speaking of that…
Should I Retain a Current Vendor for My Bundled Services?
If you have decided to bundle your facility services to streamline your services and fit your budget, the final question is whom you should choose to handle everything. It could be a vendor that currently provides some services, but it doesn’t necessarily need to be.
Here are some questions to consider when choosing one vendor to manage and maintain your property or facility:
- Does the vendor specialize in many services, or do they mainly focus on one or two, like cleaning and landscaping?
- Has the vendor provided quality services and fair pricing for you in the past?
- Do I have a good relationship with the vendor, and do they work well with my staff?
- Can the vendor provide references related to the services they will be hired to provide?
- Does the vendor have the technology and processes to adapt to environmental changes?
Want to Learn More about Bundling Services?
As a one-stop shop for property management and facility services, we can assist you as you try to offset higher costs and demand. If you would like to learn more about our services or schedule a walkthrough of your property or facility, we are available anytime.
With Berman, you will have experts on your side who will take a proactive approach to keep your property safe and clean.