As a business, you likely have a large amount of expenses to budget for each year. Employee benefits, payroll, insurance, office supplies, rent . . . the list goes on.
Do you have your HVAC expenses on that list? Setting a comprehensive HVAC budget — which accounts for monthly expenses, unexpected costs and new equipment — can be complex, but plays a crucial part in cost management and facility operations management.
Establish an average monthly operating budget
Look at past HVAC utility bills to help you anticipate future monthly spend. Keep in mind seasonal abnormalities (especially if you’re right here in Northeast Ohio) that may cause you to spend more in certain months. Establishing an average monthly cost will help you accurately forecast for the year.
Sign up for regular maintenance
Scheduling regular maintenance helps you to properly estimate your total HVAC budget. Not only will your maintenance be a set cost, but as part of your plan, you can also work with your heating and cooling company to plan out services and repairs you may need in the future. Most importantly, keeping up with regular maintenance can help you avoid unanticipated expenses due to unexpected breakdowns and replacements.
Create an emergency fund
Even with the proper maintenance plan in place, you may run into unexpected issues. Having an emergency fund in place for these situations will make them a little less detrimental to your budget. It’s always better to have it and not need it than the other way around.
Plan in advance for replacements
A reactive replacement plan, meaning you’re replacing equipment only when you absolutely need to, does not benefit your facility or your wallet in the long run.
The goal is to carefully plan out when replacements should and will occur. Without the right data, you could be replacing equipment too early or upgrading too late. This is why analyzing and forecasting is extremely important. You may not realize the costs associated with running old equipment. In fact, replacing your old equipment with something new can save you money on energy bills for years to come, making this the more cost-effective solution in the long run.
Additionaly, when you are proactive in your replacement approach, you’re able to thoroughly research and compare different options and brands, enabling you to choose the one that’s best for your unique needs. You’ll also have more time to determine whether or not you qualify for tax rebates or other incentives. Finally, planning ahead allows you to replace equipment in stages as funding or timing permits, rather than all at once in a way that could negatively impact your budget.
As we head towards Q4, now is the time to start thinking about your HVAC budget for 2020. If you have any questions, don’t hesitate to contact us!