The FM Professional

Facility management budget: 5 tips for facilities managers

David Spence
October 16th, 2018

Facility management budget: tips to become a better budgeter


Not planning ahead, not thinking about asset maintenance and not analyzing past expenses for possible cost-saving measures—all of this can lead to a downward slide of emergency spending. A facility management budget is essential. What would the steps to the opposite course,  a healthy budget that’s been well-thought-out, look like? Read these 5 tips to find out.

1. Act Like a Business Owner

To be a smarter spender, one option is to act like a salesman. Buildings magazine recommends “investment-based budgeting”—i.e. treating facilities like a company that offers services at certain prices. Each of your “customers” (i.e. each department, including facilities) has a certain portion of your budget that they may use. The specific number is decided between you and each individual department.

What’s the purpose of doing all this? Approaching your budget this way prevents situations where you’re pulled in several different directions at once and spend more than you intended.

For all your careful planning, something unexpected could happen at any moment. That’s why it’s also important to have an emergency budget. This will be insurance for the facility, in case “deferred maintenance” snowballs into a larger problem (though you wouldn’t let that happen, right?). Another thing to consider? Your contractor budget. To determine this number, clarify what work needs to be outsourced, weigh contractor bids, and “hold negotiations that clearly define the work, payment terms, and inspection process to assure compliance.”

2. Research, Research, Research

doing research for your facilities budget

Any kind of successful budget planning requires you spend a considerable amount of time researching. For example, if you decide to treat facilities as a business, figuring out how to price your services involves a good amount of information-gathering, from thinking about what services you’ll offer to predicting how often they’ll be needed by individual departments.

It’s not at all unusual for FMs to factor in a lot of time for budget planning—one FM interviewed by FacilitiesNet starts planning “next fiscal year’s budget about 10 months before the current fiscal year ends.”

3. Sell Your Department Wisely

When you’re explaining your overall budget to the C-suite, it’s important to communicate well.

Knowing this, Tim Woodley, the Director of Operations for West Linn-Wilsonville School District in Portland, Oregon, has a strategy for gaining budget approval. “We always present our budgets by leading with how the proposal responds to a real problem. In other words, there has to be a compelling reason based on our mission for why we would submit budgets for anything.”

By presenting specific information on how and why you’ve chosen your budget numbers, you can help the C-suite see that your budget is well within reason.

4. Start a Dialogue

Facility manager having meeting in the office

Another tip for interacting with executives: Meet with company leaders to discuss what facilities can do to support the organization’s overall goals. The back and forth can not only help both parties try to meet the other halfway; but it may also lead to new ideas on how your department can cut down on its expenses.

Also, consulting with your coworkers on the floor can reveal beneficial information. There are eyes and ears all over the building that notice things you may not catch on your own. See what your coworkers say in their satisfaction surveys. What are the main issues they discuss? What about the maintenance team? What common challenges do they face? Once you have this qualitative data, collect some quantitative data, too, by talking with the finance department. Find out the exact cost of the inefficiencies in the facility. This can help you make a stronger case when you talk to a C-level executive. With hard data, you can show that a purchase addressing the problem will be well worth the money.

5. Keep Your Maintenance On-Schedule

office maintenance pendant light bulb

This tip may sound obvious, but in some cases facilities managers may feel so much pressure to save money that they neglect to perform maintenance on the equipment that needs it. They figure that as long as it functions, that’s good enough for the time being.

Of course, this can have a snowball effect. The asset runs down until it stops functioning properly altogether, and the cost to repair the major damage—or worse, replace the asset—is way more than it would have cost to have repaired the initial, minor damage.


Don’t make the mistake of thinking that preventive maintenance isn’t important. When you think about the cost of an asset— when you draw up a life cycle cost analysis, for example—it’s important to think about the cost of maintenance. Getting a handle on this will help you budget the amount needed for an asset’s upkeep. More importantly, though, it will also help you protect the business, since neglecting to budget for maintenance could cause an expensive breakdown. Maintenance costs should include basic repairs, the skills required, and the time needed to complete the repairs. If you don’t have many details specifying this information, talk to the equipment’s original manufacturers, as well as your contractors, to get a ballpark estimate.

Also, balancing your actual inventory is key. If you purchase too much inventory, it will be an unnecessary drain on the company’s finances. If, on the other hand, you don’t purchase enough inventory, the lack could cause a hiccup in the company’s operations. Deciding how much inventory you’ll need for your asset repairs doesn’t have to be difficult—just consult the LCCA for a piece of equipment

A facility management budget requires research and negotiation. All the extra time you put in on the front end, however, is nothing compared to the potential disaster that could await if you neglect your homework. Crunch some numbers, make some phone calls, and spend some time analyzing asset costs. When nothing happens—no minor catastrophes on the fourteenth floor, or the first floor, or any floor in between—and your budget remains intact, you can congratulate yourself on a job well done.

photo credit: Rawpixel, Jo SzczepanskaRawpixel, Pexels