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RESOLVE TO BEGIN 2014 WITH A CAPITAL PLAN

- Friday, January 10, 2014

An old adage states, those who fail to plan plan to fail. In the world of business maintenance it is imperative to plan for the inevitable. Roofs will leak machines will break and repairs will be essential. As we embark on a new year, there is no better time than the present to implement a yearly capital plan or refresh the one currently in place. 

The capital plan will serve several purposes. First, it will serve as a means to evaluate the facilities and components current physical condition; the second purpose will be to identify existing problems and needs as well as predict future needs; the third goal will be to project cost for operation and upkeep while working these numbers into a sustainable budget. This can be accomplished through the following steps. 
Step 1: Perform an assessment of facilities condition. Your facility manager should provide a great starting point for collecting this data. Additionally, your facility manager should be able to use this data to analyze benchmarks.  In the assessment, the following information should be detailed:
an inventory of all property and equipment notating the original price
an assessment of the current condition of all equipment and facilities notating any urgent problems or code violations
a projection of the remaining lifespan of HVAC, roofing, etc. 
Step 2: Prioritize projects. Capital planning provides opportunity to protect assets while avoiding emergency repair cost. Experts in facilities management suggest prioritizing projects using the following guidelines: 
Projects that involve health risk or violate regulations should be top priority
This should be followed by projects that pose the greatest risk to assets if delayed should. 
Next, consider projects that will reduce operation cost or allow for greater efficiency in the future
Finally, look to projects that will add value to your facility
Step 3: Create a yearly budget for projects. Capital planning and budget creation goes hand in hand. With your projects now prioritized, you can begin to look at the cost associated with these projects. Planning in advance allows for the creation of more reasonable budgets. Be wary of using the best-case scenario when creating your budget. The budget should also reflect the cost that would be saved by implementing these projects. This is an often overlooked, but necessary step. 
Step 4: Prepare for ongoing implementation. Budgets will need to be reviewed as projects progress. Modifications to the capital plan will need to be considered and data will need to undergo revisions. Finally, plan for a review and update at the end of the year along with the creation of an updated capital plan. 

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