I recently was talking through the growth challenges and next steps for a business. They are out of space and continued growth is on the horizon. Leadership initially thought they would expand or build a new facility to accommodate the addition of new employees.
But construction costs came in higher than they expected, mostly because a tightened labor market created by the last recession. Commercial construction costs in Minnesota have risen nearly 20 percent since 2008, according to RS Means. The local contractors we work with have shared with me that they have seen a 15 percent increase in the last two years alone.
When space becomes crowded, the first thought of many owners is to build new or do an expansion of their current facility. Sometimes, that’s not the best choice. In today’s economy, we can help organizations find better solutions when we explore ways to achieve their goals without adding space or incurring large construction costs.
In many markets, there is vacant space – and often owners hungry for a lease. With the shell and utilities provided, vacant space can be remodeled to meet a client’s need, often in a way that’s easier on the budget. In some cases, we help organizations review their operations and uncover space they didn’t realize they had in their existing buildings, avoiding expansion altogether.
We’re seeing more organizations growing and needing to rethink their space and facility plans to be more efficient with their space and their operational costs. Here are three of the steps to take to better align your spaces, especially during growth:
- Identify who’s impacted by the growth.
Knowing what’s driving your growth today and into the future is just the beginning. Uncovering who’s impacted by that growth is where organizations can create a more valuable facility roadmap. For some organizations, it’s often a particular business unit or product driving the growth and that may not impact all areas of the business. Track that growth through the people and departments impacted and create a projection of employees and activities for a specific planning window, like the next 3, 5 and 10 years. This helps you identify what areas may need additional room into the future and allow you to plan for it.
- Take everything out of the closet.
During times of growth, we don’t always put things in the right places. Think about a storage closet in your own house. When it begins busting at the seams, you pull everything out, create piles by type and reassess the organization plan. With a new look, you can fit more things – and even better – than you had them initially. And most often there are some things you are storing that you no longer need. The same is true with our buildings. Take everything out, see what room it needs and then begin placing it back together with future needs in mind. Keep in mind that not everything needs to go back into the closet. This is an opportunity to consider what elements of the business could be moved off site, often into less expensive space.
- Map out your interconnectivity.
When considering whom to move where, it’s important to outline the physical interconnectivity needed. More and more can be done virtually, but not everything. Some departments and people should work in close proximity because it drives more efficiency and productivity for the business. Take the time to understand what departments or areas of your business need to be in close proximity to one another and which ones don’t. Who needs direct physical customer contact, and who doesn’t? That will help you know who makes the most sense to move to a newly remodeled lease building.
Knowing what the best facility path will be for your growing business requires you to take a step back and thoughtfully consider the needs of today while anticipating the needs of the future.
It’s important to revamp the thought process here and move away from the “This is how we’ve always done it” thinking. Keep asking yourself: Is there a better way to accomplish the same outcome with less space?
In one case, we helped an organization “create space” within their existing facility by standardizing workstations, organizing them differently and executing a new storage system of high density and electronic records that included moving seldom accessed files off site.
There’s no magic formula. But so often, as we explore the spaces and the needs, we’re able to uncover a new facility plan that makes more sense for the business and positions it for more growth.
What’s a facility question you have? Ask it here.