The ROI of Renovating: How Upgrading Your Business Facility Adds Value

Your commercial facility can reveal a lot about your business. Whether it’s an office building, production facility, warehouse, or retail center, it acts as a giant billboard, communicating who you are and how you do it.

Ensuring that your facility sends the right message can help you attract new business and outpace your competitors. A well-designed and well-run commercial renovation has the potential to deliver a great ROI, boosting your bottom line by increasing business, capacity, and efficiency.

That said, making changes to your facility costs money. Commercial renovations and upgrades should be viewed as a strategic investment, and you should weigh its potential for returns against its costs.

We’ll explore the benefits of a facility renovation for your business and share steps you can take to ensure you add substantial value.

How Commercial Renovations Deliver an ROI

It’s important to evaluate all the ways that your commercial construction project can contribute to your bottom line. Here are some common examples of how a renovation adds value to your organization.

Increase in Property Value

If you own it, your facility is an asset on your balance sheet. Making smart improvements should enhance its worth. While how much it increases is dependent on the scope of the project, several common changes should enhance its attractiveness to potential buyers. These include:

• infrastructure upgrades
• facility management and building technology
• refreshed aesthetics and finishes
• increases in footprint or optimized layouts
• sustainability features

Reducing Utility and Maintenance Costs

An updated building also has the potential to yield cost savings beyond the initial investment in the form of energy-efficient upgrades and new equipment and appliances. Not only do they cost less to run, but they can also reduce maintenance costs and may improve operational efficiency.

Improved Efficiency and Workflow

Whether you’re looking to optimize what you already have, enhance capacity, or expand to increase business offerings, you need the right space to support your efforts. Great teams can work better when their physical space supports their needs.

Renovations to your business are a great time to integrate new technologies and layouts that enhance workflows and improve efficiency. With a clear picture of what your team does and what resources they need to do it, talented design teams can create spaces that allow work to flow seamlessly, and experienced construction teams can make those designs a reality.

Market Advantage

While we all know we shouldn’t judge a book by its cover, the truth is, we sometimes still do. The façade of your facility can act like the face of your business and brand. Right or wrong, the way it looks and is taken care of may give on-lookers and prospective clients an impression of how your company takes care of its projects and clients.

Projecting the right image can increase your brand awareness, as well as foot traffic and customer engagement (if applicable). This can give you an edge against your competitors. With a renovation, you have the opportunity to create a space that enhances your customers’/clients’ experience and their perception of your company.

Controlling Investment Costs

On the flip side of the ROI equation is the investment cost — how much you spend to renovate your business.

To ensure you’re making a great investment, you need to use your resources wisely. Here’s how to get that done.

Evaluate Total Lifecycle Costs

During a construction project, it’s easy to focus on project costs and the construction budget. But if we focus only on how much a specific element will cost to build and install, we can lose sight of the other costs associated with it down the road.

With the help of your project team, you should evaluate the total life cycle cost of the items you’re choosing. These include:

• anticipated operation costs
• maintenance fees
• replacement costs (price and duration)
• disposal costs

What’s cheapest to install today could be the most expensive in the long run, driving down your project’s ROI.

A Collaborative Approach

Collaboration is more than just a corporate buzzword. A team that is truly committed to it is often better at driving value and keeping costs in check.

On a construction project, there are several specialized teams, from architects and designers to engineers and construction contractors. If these teams are committed to the end result of the project, and not just their respective tasks, they collaborate more, and the end result is better. Utilizing a design-build project delivery approach comes with this level of collaboration baked in. This delivery method puts all the team members on the same side, so it’s in everyone’s best interest to collaborate.

As design-build takes its place among the most popular project delivery methods, it’s been shown to deliver projects for lower costs and in less time than other methods, like design-bid-build. This helps you get the most for the money and time you invest in this project, driving that ROI higher.

Experienced Contractors with an Open-Book Policy

Experience and honesty are key markers of a construction firm that will carry your project successfully to the finish line. While experience is easier to assess, honesty can be harder to evaluate until it’s too late.

At Horst Construction, doing things the right way is a huge part of our mission and identity. We’re champions of our clients and are there to serve them and ensure their resources are being spent wisely. To put meaning behind that, we have an open-book approach to all our projects.

We believe information about your project should be easy to access and understand, so you know your money is being spent in ways that will drive ROI on the project, and ultimately, your business’s bottom line.

Learn more about how we can enhance the value of your project. Reach out and tell us about it today!

Posted April 09, 2024