Month: September 2013
Don’t Be Fooled-DIY Office Renos and Office Moves Can Add to Your Operational Expenses
Ok. So your business needs to undergo some form of physical change to remain competitive in its market –maybe an office “facelift” or maybe an expansion into a new office. Whatever your decision, you know you don’t want to incur too many additional expenses to have your office renovated or moved. You decide that you and your employees will be able to do the work on your own with little, if any, external help.
At first glance this might seem like a viable option. After all, your expenditures wouldn’t go to interior designers or consultants, and if moving, you may only need to rent a truck especially if your staff does all the packing. Big savings, right?
Wrong. You may not realize it, but DIY office renovations and office moves can actually add hidden costs to your operational expenses.
How? Glad you asked.
First, let’s consider the term “operational expenses”. By definition, operational expenses are “day-to-day expenses incurred in the normal course of business”1. In other words, operational expenses are the moneys spent to keep your business functioning each day, every day. This includes materials as well as labour costs. While DIY office renovations or moves may not have a direct affect on some operational expenses, they would have a direct effect on others. For this blog, let’s focus on the effect on labour.
According to Statistics Canada, the average hourly labour wage for in August 2013 is $23.86 per person2. Based on a 40-hour week, that translates into an operating expense of $954.40/person/week. Multiply that by the number of staff you have in your company and you have your weekly operational expense for the labour category. (For the sake of the chart below, let’s assume a staff of 150 people) You pay those staff to do particular jobs that propel the functioning of your company. Imagine taking those same staff and redirecting their attention to fulfill office renovation or move tasks. Your physical operational expense for labour will not change, but the time taken away from your staff to do the job(s) you originally hired them to do add at least one hidden cost—the cost of their jobs not getting done! This may lead to
- Your overall business operations being placed on hold
- Delays in production or project completion
- Missed business opportunities (new and recurring)
- Loss of business to your competition
- Increased risk of consumer or stakeholder dissatisfaction
- Overworked staff
Place a dollar value on each of the above and sum it up. You may find that the total hidden cost of DIY office renovation or move adds up to millions, maybe even billions of dollars—at least 10 times the cost of hiring a space planning and relocation specialist firm to do the full job for you.
So do your business a favour. Don’t risk adding hidden costs to your operational expenses in the face of an office renovation or move. Instead take time to contact a space planning and relocation specialist in your area and have them do the job. It will actually save you time and money.
1 Investing Answers Financial Dictionary, “Operating Expense”, http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/operating-expense-2792
2 Statistics Canada, “Average hourly wages of employees by selected characteristics and occupation, unadjusted data, by province (monthly)”, http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/labr69a-eng.htm