ARE YOUR FACILITIES KEEPING UP WITH YOUR PROJECTED GROWTH?
Marker, Inc.
We believe that a great builder requires significant investment in the people and the process.
By Senior Vice President Mike Girouard - May 2024
Business leaders analyze historical data, market trends and performance to make short-term predictions and more quantitative forecasting to project where their company will be in three, five and even 10 years from now.
One critical element of any business strategy that is often overlooked is whether existing facilities are designed to accommodate the planned growth, especially given that most construction projects average between one and three years to complete.
So, how do you decide whether to renovate, expand or consider building new and the right time to do so?
Every project is unique, and there are many factors that will impact each situation. However, there are some general pros and cons to take into consideration when deciding whether your company should build new or renovate if projecting growth.
DESIGN
New construction allows for complete customization of design to the company’s exact specifications, manufacturing workflows and material handling. This process allows for construction of the new space to take place while maintaining operations in existing space, causing fewer disruptions to daily business.
New construction could also provide a chance to build a larger facility than your immediate needs to support future needs. This additional space can be leased to offset investment costs until such a time it is needed.
Remodeling is more sustainable than new construction and typically more cost-effective for companies needing modernization and energy initiatives over more space. Strong commercial construction firms are skilled at phasing strategies to minimize disruption to operations during the remodeling process. These plans can be managed under tight timelines through schedule sequencing strategies.
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FINANCIAL
Building a new facility comes with additional layers of costs, including appraisal, land purchase, down payment, loan fees, closing costs, building inspections, utility connections, fire protection and drainage compliance requirements, unsuitable soil remediation potential and more. A new construction path is usually more costly than a renovation.
There are situations though, where cities will offer tax breaks, grants or loans on new construction if the area has developed incentives for job creation. Along the same lines, some cities may also offer incentives for companies to stay.
TIMING
The time to start talking to a leading commercial construction company is well before your sales projections predict needing the space for growth. Builders are your best ally in this situation to help with early planning and weighing the pros and cons mentioned. Comprehensive construction firms can help at the beginning stages of land procurement and counsel on needs assessment, feasibility studies, budgeting, constructability analysis and schedule assessments.
Through early engagement, preconstruction teams can assist with cost control, estimating and value engineering solutions to work within your budget. Experienced firms excel in preplanning, knowing that it is the critical foundation for a well-executed project.
We recommend that business leaders add facility management and planning as a part of your annual strategic planning process and secure a trusted commercial builder to guide you.