Will The ROI Of A Commercial Renovation Be Worth It?
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Will the ROI of a Commercial Renovation be Worth It?

 
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Taking on a commercial renovation is a big undertaking. We’re at a time of general economic uncertainty right now as the coronavirus pandemic continues to affect businesses on a global level, which may give you even more pause to take on a commercial renovation project you’ve been considering.

There are different elements that go into commercial renovations from hiring a contractor who understands commercial needs to the potential that you’ll need custom building materials.

Before you can delve into the specifics of your budget, you need to have a handle on the scope of work that might be necessary, and whether or not it’s going to give you the return you need.

Will the ROI of a Commercial Renovation be Worth It?

The following are some things to consider as far as whether or not a commercial renovation will be worth it from a business standpoint.

Why Do You Want to Renovate?

Before you start a renovation, you need to think about what it is you want to achieve from a business standpoint.

Some reasons you might do a commercial renovation include:

  • You may want to boost the traffic to your business. If you have customers or clients in and out of your business frequently, you might be most interested in a renovation for aesthetic reasons. It’s also possible that if it applies to your business, you could do a renovation as part of a larger marketing effort or a rebranding of your business.
  • Sometimes there are more logistical reasons for doing a commercial renovation. For example, maybe you want to make your space and operations more efficient.
  • You could need space for new employees or new equipment, which would mean the ROI of a commercial renovation would be less of a concern than it would be if you were doing it for a reason like aesthetics.
  • A commercial renovation has the potential to help you retain current employees and attract new talent, particularly if your workspace is outdated, cramped, or otherwise unappealing. Your workspace plays a big role in your corporate culture.

Do Market Research

To be able to quantify whether or not a commercial renovation is going to be worth it for your business, you may need to do market research, and this is frequently overlooked in commercial renovations. It’s an important way to determine potential ROI as you’re making decisions, however.

To do market research on a commercial project, you’ll want to think about specific metrics such as how much a renovation could improve your efficiency or how many new customers you might acquire.

What Projects Tend to Be the Best For ROI?

If you think you’re going to take on a commercial renovation, which projects tend to have the best ROI?

First, there are features and projects that are going to make the space safer. That’s almost always going to give you a positive ROI.

When you install updated and new safety features, it can reduce the potential for accidents, help ensure your employees remain productive, and reduce the risk of employees filing workers’ compensation claims.

You can also give your business a reputation boost by showing that you are dedicated to maintaining a safe and healthy environment.

What you may not realize is that a commercial renovation can improve the productivity of your employees and that is financially so important.

Some of the specific things you can do in a commercial renovation to boost employee productivity include installing new lighting and widening walkways. You can also improve your HVAC system or perhaps create a dedicated break space for employees.

Any projects that can help your business be greener are valuable from a marketing and cultural standpoint and also financially.

Some of the eco-friendly projects to think about include again, improvements to your HVAC system and the installation of low-flow plumbing. Installing new windows can help you reduce your energy costs, as can the installation of what’s called a cool roof. A cool roof reflects sunlight off of it and keeps your building interior cooler when it’s hot outside.

You do need to consider all of the above factors before you even start taking bids from contractors.

Take a look around as you’re doing market research and see how comparable properties look relative to yours, or comparable businesses, and where you might be able to make changes worth the cost.

If you own and rent out commercial property and you’re thinking about renovations, you’ll be looking at factors like how much more you can earn in rent, and whether or not you’ll be able to attract better quality tenants by making changes.

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