Last week, this survey published by UK Construction Week caught my eye.
The headline statistic is that 72% say building performance is the most important feature in a commercial building or workplace. This immediately throws up two questions:
1. Will building performance make a financial difference to my business? (clue – the short answer is “yes, hugely”)
2. What does building performance actually mean and why is it so important?
For most businesses that own or lease their premises, building performance presents a goldmine of opportunity. In this short blog, I’ll explore how:
- Better building performance can reduce your operating costs by 10% – 15%
- Better building performance can deliver you a Return On Investment (ROI) of 400% through improved staff performance
- What you need to do to achieve this?
1.Better building performance can reduce your costs by 10-15%
Put simply – if your net operating margin is 5% – a saving of £50,000 has the same effect on your bottom line as increasing your sales by £1m.
Naturally most businesses pursue sales growth, but does your business miss out on savings opportunities that can be reinvested to grow the business?
2.Better building performance can deliver a ROI of 400% through improved staff performance
There’s compelling research showing how sub optimal environments (factors such as noise, ventilation, space, temperature and light) can erode staff productivity to a huge extent. For instance, workers gain a 101% increase in cognitive scores in a green, well ventilated office. Every business should treat these studies with utmost seriousness. This is not pie in the sky stuff – we can see the world’s most innovative companies – Google, Facebook – place great emphasis on this for a reason.
For every £1 spent on operating business premises, a typical business will spend £40 on staff and business costs.
Based on research, and backed up with our own experience, we can assume that 10% increase in staff productivity is entirely achievable.
The chart below shows how a business that spends £4m a year on staff, can achieve a ROI of 400% – £400,000 of increased performance from carefully optimising its £100,000 annual spend on buildings operations.
3. What do you need to do to achieve this?
We strongly recommend you appoint one person with overall responsibility for building performance – with clear objectives to deliver the financial results described above, as well as other important measure of success.
This person should be properly trained and well versed in the correct use of buildings and their controls.
We’re happy to offer advice on how to unlock these financial benefits – please call or email for an informal chat, or download our no-nonsense guide to improving your business through building performance.
At LCMB we help our clients improve their building performance. Based on this experience we’ve written a plain language guide explaining how to improve building and business performance, download our guide to get our tips for improving your business performance or contact John O’Brien on t: 01295 722823 e: [email protected] for an informal free consultation.