Understanding the Return on Investment for Your Business
Preventive maintenance tends to be one of those things that get pushed to the side to make room for other business expenses. We want to convince you otherwise. It shouldn’t be a surprise that well-maintained equipment operates more efficiently, lasts longer, and provides you with a higher level of predictability for an assets’ lifespan. Waiting to perform maintenance until a piece of equipment malfunctions or stops running is not only risky but often very expensive. We understand that you may be reluctant to spend money on “maybes,” but we’ll detail how routine preventive maintenance will save you time, money and future headaches.
What Is Preventive Maintenance?
Preventive Maintenance is a scheduled program of regular inspections, updates, adjustments or replacement of worn or failing parts in order to maintain a piece of equipment’s efficiency and function. It’s important to note the word, “regular.” A good maintenance program will evaluate everything in your building on a regular schedule whether it seems to need it or not.
The idea is to prevent small issues from turning into major problems. It helps to keep you running from one emergency break down to the next. Additionally, preventive care also helps protect and maintain the condition of your properties to ensure everything stays in good, running condition. Ideally, it should help you catch breakdowns before they occur so you have the time to react accordingly, rather than having to turn to reactionary decision making.
Owning and operating a business requires thoughtful and strategic planning to maximize the return on the money you spend. The initial cost of a piece of equipment, like an air conditioner unit, is only a part of the overall cost associated with its ownership. Physical assets require care, and at the end of the day, how a company chooses to manage its equipment will absolutely impact its bottom line.
The Benefits of Preventive Maintenance
A preventive maintenance plan should be a necessity, not a luxury. We understand that businesses have limited resources and that there are always going to be guaranteed expenses – like making payroll – and that the cost of a major repair is not as certain. This leads a lot of businesses to put preventive maintenance on the back burner, even if the long-term benefits are obvious. Regularly scheduled proactive maintenance saves you more money than it costs. While you may not see immediate savings in the current year, it will definitely save you money in the long run.
We’ve put together a list of benefits of performing preventive maintenance to provide clarity about why investing in a regular program is essential to running your business.
Return on Investment
A study titled “Determining the Economic Value of Preventive Maintenance” conducted by Wei Lin Koo and Tracy Van Hoy, P.E. , of Jones Lang LaSalle looked at 25 years of maintenance equipment and replacement costs for about one million square feet of facilities across various industries. They found that investing in preventive maintenance programs produced significant financial returns. Typical ROIs for successful businesses tend to see around 5-15%, but as you can see in the chart below, the return on investment for preventive maintenance for equipment can be upwards of 500%.
Extends the Life of Your EquipmentWhen you maintain your equipment, you’ll extend its useful life by years. Just like performing regular maintenance on your vehicles ensures they run as long as possible, the same is true for your building’s HVAC equipment. Not having to replace big assets as often creates significant savings.
Savings in Energy Costs
When you regularly service your equipment, it helps preserve the energy efficiency of the equipment. The more efficient your equipment, the less you’ll spend monthly on energy costs, therefore producing significant savings year over year.
Affects Property Value
When properties are well maintained, they tend to be more marketable and sell at higher price points. Smart buyers will likely perform an analysis of a building prior to purchase that often includes the maintenance history of building systems.
Improves Safety and Security
Preventive maintenance reduces the risk of catastrophic failures and also reduces the risk of fire, electrical explosions, water leaks, sewage or refrigerant.
Reduce Long-Term Costs of Insurance
When your building equipment is taken care of, you reduce the risk of accidents.
Prevent Business Closures due to Repairs
If you had to close your doors for a day, what would that loss of business cost you?
How to Schedule Preventive Maintenance with TLC
When you sign up for a Commercial Maintenance Agreement (CMA) with TLC, you’ll get regular inspections and maintenance on your HVAC, plumbing and electrical equipment. After each visit, you will receive a report that includes information about what services we performed and any issues we may have found. As a CMA customer, you’ll get a discount on parts and our hourly rate if you end up needing extra repairs.
Signing up for a CMA with TLC is simple and straightforward. We provide free assessments and a cost proposal based on your building’s individual needs. The cost of labor and parts are all included in the price. The total cost of your CMA is dependent on the type, number, and size of your equipment.
You have the choice to schedule preventive maintenance visits either two times a year or four (we recommend four). All of our visits are scheduled with you for the year, so you don’t have to worry about setting up each appointment. The visits coincide with seasonal changes, so rest assured your equipment will be ready to go whatever the weather brings.
Call Mike Chambers, TLC’s CMA Manager, to start the conversation today!
Schedule Service or Request an Estimate for your business