Companies everywhere are looking for ways to trim excess spending. Cutting overhead costs is an ongoing, universal objective, regardless of the type of business you are in or the type of buildings you occupy.
Perhaps you have been identifying and reducing operating costs but need to do more. Let’s look at strategies you should implement to reduce your operating costs further.
1. Itemize Your Operating Costs
Before you know where to make cuts, you have to know where your money is going now. Operating costs include landscaping, utilities and building maintenance, among other expenses. Since your largest operating costs are usually real estate and business personal property taxes, make sure to include those annual numbers, too.
2. Identify Trends
Some of your operational costs remain relatively consistent year over year. But if you identify trending increases, there’s probably room to reduce operational costs. Assess why these costs have gone up, and take action based on this insight.
Make sure to also look closely at trends in your property tax assessment. Because this is your greatest occupancy cost, any increase could have a significant impact on your cash flow. For example, if your property taxes were $100,000 a year and you were unexpectedly hit with a 25% increase based on your next property tax assessment, your operating costs would soar. (That would also tell you that it might be a good idea to file a property tax appeal.)
3. Partner With A Facilities Management Firm
You’re probably an expert in your business, but you may not have expertise in securing operational cost reductions. If you are not already working with a facilities management firm, you should explore that option. The firm’s skills and purchasing power could help you significantly with your operational costs, and they have experience negotiating for savings.
Opportunities for savings are usually found in your energy bill, or in your bills for janitorial or building maintenance services. Many facilities management firms are compensated with a percentage of the savings they secure for clients, so they have a compelling incentive to secure the greatest savings possible for your company.
If you don’t know a facilities management expert or an energy management expert, call RPTA today for a referral to an expert.
4. Partner With Property Tax Experts
Because property taxes represent the greatest operational cost your company faces, you need to partner with property tax experts as well. Facilities managers don’t have the necessary experience in property taxes to reduce these costs, but together, this custom team of advisors may deliver more cost savings than you ever expected.
On average, companies that work with qualified property tax experts could potentially receive a 25 to 40% property tax reduction. That’s a lot of money to leave on the table if you continue to pay your assessment without question.
Want to learn more about reducing your operational costs? Download this free whitepaper now.