The FM Professional

Budget Planning for Facility Managers: Expert Strategies

David Spence
June 7th, 2018

We went to some great education sessions at IFMA’s Facility Fusion, and one of the most interesting titles that has stood the test of time was “They cut my budget again…. Now what?” 

The seminar was based on the approach facilities managers should take in response to continuing cuts to their budget. The presentation was given by Peter Stroup, Director of Facilities at Harvard Medical School.

As Director of Facilities, Peter is responsible for all aspects of facilities maintenance, operations and energy management at the 2.7 million square foot teaching and medical research campus in Boston.

The main objectives of the session were to ask facility managers some tough budget-related questions, and then discuss potential solutions. The questions were broken down into three main parts:

1. How should a Facility Manager or Director of Facilities make their budget request to upper management credible?
2. What is the best way to influence the decision on the facilities budget request, owning the outcome long before the request actually takes place?
3. What should the facilities management budget look like? Will the corporate template work, and if not, how should the proposal look?

facility management calculate budget

Most US companies were affected by the financial crisis in 2007-2008, and the effects of this shock resonated through businesses worldwide. Many companies suffered dramatic reductions in revenue, and Facility Managers were some of the first groups to see their department’s budgets slashed. Financial recovery is well underway, but FMs are continuing to operate at or below minimum budgets as CEOs look to streamline operations. The days of Facilities Managers getting large budget allocations to manage their office spaces are a distant memory, aside from perhaps at fast-growing tech companies with lots of funding.

Peter’s talk focused on examining the factors that are critical to budget approval success in order to position Facilities Managers for the best possible outcome (hopefully walking away from the budget meeting with a smile!) Preparing for the C suite requires FMs to have a good awareness of what their decision making needs are, which include internal (e.g. the company mission and overall strategy) and external (e.g. funding and the state of the market) influences.

Peter outlined that the Facility Manager’s credibility and perception in the eyes of upper management is essential – what those competencies likely are, and some means to overcome weaknesses. Is the Facility Manager a good financial steward? Do they deliver on their promises? How often do they miss their budget targets, and how often are costs incurred which could have been prevented with better planning on the Facility Team’s behalf?

If any of these are factors, the FM can expect some resistance from the CFO when they ask for higher budgets, and taking steps to fix these issues can go a long way to “greasing the wheels” before a budget meeting even takes place.

Once the FM has an audience willing to listen to their budget requests, transparency of details and a logical and flexible approach to requested budget items is essential. A critical factor is having a well-ordered list of requirements for the facilities budget with their associated priorities.

develop color coded priority system for FM budget

Peter suggested using a green/yellow/red system, whereby tasks essential to the running of the facility are designated as green (such as health and safety measures) and less urgent matters designated yellow, which can be pushed to the next budget if necessary. Items listed as red are “nice-to-haves” – not essential, but available for inclusion if budget allows. This makes it easier for the FM to prioritize essential items and give justification for their inclusion in the budget. Transparency and thoroughness is important. By properly planning and including everything, and then giving it a clear priority rating that all parties are aware of, the FM goes some distance to mitigate fallout in the event that an item which was not allocated sufficient budget causes a problem in the future.


One of Peter’s slides at the show showed examples of Harvard Medical School’s budgets and priorities for a wide range of expenses, everything from fire and smoke damper inspections to duct cleaning and exit sign replacements.

Modernity and sleekness are important in today’s tech-driven workplace, and not just in terms of how a software application looks. Data visibility should be instant and reports should run in seconds, not minutes or hours. Knowing your numbers is a big part of being well prepared for a budget meeting and your facilities management software can help you with that.

Photos: Shutterstock, Pixabay, Shutterstock