MAY 2025CONSTRUCTIONBUSINESSREVIEW.COM8IN MYOPINIONBy Baris Sevinc, Senior Facilities Service Director, Equity ResidentialAs a facilities professional, one of the key responsibilities is to ensure the smooth operation of the facility within the allocated budget. One crucial aspect of this is preparing a realistic operational facilities expense budget. A well-planned PREPARING AN OPERATIONAL FACILITIES EXPENSE BUDGETBaris Sevincand comprehensive budget not only helps in managing costs effectively but also ensures that all necessary expenses are accounted for. I summarized the steps I learned throughout the years in preparing an operational facilities expense budget.1. Gather Information: The first step in preparing an expense budget is to gather all the necessary information. This includes reviewing past budgets, analyzing historical data, and consulting with relevant stakeholders. By understanding the facility's past expenses and fuature requirements, you can make informed decisions while creating the budget. Reviewing current contracts and the expiration dates will also give you an opportunity to renegotiate pricing.2. Identify Expense Categories: Next, you need to identify the different expense categories that are relevant to your facility. Common expense categories include preventative maintenance contracts, maintenance and repairs, cleaning services, security, and supplies. By categorizing expenses, you can ensure that all aspects of facility management are covered in the budget.3. Estimate Expenses: Once the expense categories are identified, it is time to estimate the expenses for each category. This requires careful analysis and consideration of various factors such as market rates, annual increases and facility-specific requirements. It is essential to be realistic and consider potential fluctuations in expenses while estimating. Starting early and getting proposals for specific categories can help you identify the committed cost for your upcoming year. Everything else will be unforeseen repair and maintenance expenses. These can be estimated by looking at the historical data and the year over year comparison. In example an uptrend on HVAC expenses might be an indication of aging equipment and may need you to allocate more funds in next year's budget.
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