Typically a planning tool more akin to the world of big hotels and large floorplan office spaces, a proper and robust FF&E plan isn’t just for big businesses. Small, medium and all types of enterprises and companies can benefit from a proper furniture, fixtures and equipment plan to manage life cycles, costs and productivity.
What Do We Mean By FF&E Plan?
If you’re wondering, “What is an FF&E plan?”, it’s a fair enough question. Especially if you are only a small business or haven’t managed your own workspace furniture in the past.
FF&E is furniture, fixtures and equipment within your building. This covers all things that don’t form part of the permanent or structural fabric of the building. These items need special consideration because they have high depreciation rates and are cumulatively expensive to replace when viewed as a whole. They are also all the things within a building that actually allow your business to function.
For the avoidance of doubt and before going any further, here’s a brief list of what falls into each category of FF&E:
- FURNITURE: everything from chairs and tables in the office to the same things in breakout or reception areas. This covers all movable and usable furniture that employees use.
- FIXTURES: from carpets to curtains and cubicles to storage units, this covers all features which are attached or fixed to the building but don’t form any structural or permanent part of the building. If they could be removed and the building could still operate, they count as (this branch of) FF&E.
- EQUIPMENT: and this is all forms of equipment: fork lifts in the warehouse to phones on the reception desk, and everything in between such as computers, meeting tables, kettles. In short, all the things that you purchase for your employees to use and that remain company property.
Note: there may be some ambiguity in the contract with your landlord or administrators/buyers when it comes to certain items, such as carpets and phonelines, as to whether they are actually FF&E which belongs to yourself.
Hopefully, you should already be starting to see what a wide scope FF&E covers when you are managing it yourself as opposed to it being provided as part of your letting agreement with a landlord.
But what is an FF&E plan?
This is something which helps you monitor life cycle and the condition of FF&E items in your business, as well as also manage the ordering and installing of replacements.
A robust FF&E plan will include:
- An itemised list of all FF&E items that the business purchases, hires or manages.
- The maximum life cycle for each item.
- The date installed.
- The predicted date of replacement.
- The item’s lead-in time (i.e. the length of time between order and delivery)
- The item’s cost(s) plus delivery.
- The item’s estimated final value (if any).
- Warranty details and supplier/manufacturer information (depending on who the contract of sale was made with).
- The facility to highlight and remind the designated FF&E manager which items will soon be up for renewal so that cost forecasting and cash flow issues can be well managed.
7 Benefits To Using A Robust FF&E Plan For Smaller Businesses
Whilst some of these benefits undoubtedly apply to all types and sizes of businesses, they are all particularly relevant for smaller businesses. With a little explanation in further detail, here are the 7 benefits to using a robust FF&E plan if you are a small business owner or manager.
- Well Planned Costs Offer Potential Savings
- Well Planned Costs Make Managing Cash Flow Easier
- Can Incorporate Advice From The Experts
- Ensures FF&E Items Are As Near Optimal Condition As Possible, At All Times
- Timings Can Be Well Planned And Managed For A Flawless Transition
- Can Be Outsourced To A Third Party
- Helps To Ensure You Can Choose What You Prefer
1. Well Planned Costs Offer Potential Savings
The main benefit of a robust FF&E plan is the fact that you will be planning what is needed well in advance of actually needing it, there is, therefore, potential that this will open up cost savings. As a general rule, ordering well in advance should offer cost savings compared to last minute orders.
Granted, this may need some negotiation, because suppliers and manufacturers also have their own cash flow and stock rotation/production issues to manage. Ordering hundreds of items will be welcomed by all suppliers and manufacturers, but then requesting a delivery date 24 months into the future may negate any potential savings.
However, you could look to negotiate an agreement where you place a deposit on future orders of products in a similar category of quality for an agreed price. This should help avoid any fluctuations in price due to unexpected production or delivery cost increases.
A simpler benefit is that you can place your orders within the supplier or manufacturer standard delivery window and not incur additional delivery costs or effectively being held to ransom if stock levels are too low elsewhere and you are forced to use one particular supplier.
2. Well Planned Costs Make Managing Cash Flow Easier
For any business, cash flow is king. For a smaller business, it is beyond crucial. Unexpected costs, that if not met could cripple the output of the business (could your business survive if phones, ICT or even desks were to break?), can be fatal for a small business operating on fine margins.
The accounts team or hired third-party accountant will be pleased with a well-managed and robust FF&E plan because it makes forecasting cash flows a whole lot easier. It could be the difference between hiring the much needed sales employee or not paying the directors again this month in order to foot the unexpected FF&E invoice cost.
3. Can Incorporate Advice From The Experts
There are various FF&E management services available and many independent suppliers will be happy to help you formulate a proper and thorough FF&E plan for your business. This will give you the chance to lean on industry experts who have a professional opinion on a range of related topics: life expectancy, value for money, reliability and performance. To name just a few examples.
They may be able to advise on potential false economy cost savings by going for low cost options too. This helps you to achieve the first two points mentioned.
As a side note, many manufacturers may be willing to help you formulate an FF&E plan, but they will always be bound to push their products and they may not be the best option available to you. A third party consultant or independent supplier is best.
4. Ensures FF&E Items Are As Near Optimal Condition As Possible, At All Times
Rather than relying on waiting for employee feedback or your own observations to spot that FF&E items are in need of replacing or refurbishing, having a plan in place will ensure that items are renewed at the right time.
This will prevent having to use worn-out or past-their-best items of FF&E whilst you wait for the cash flow levels to mean you’re ready to purchase. This will keep staff morale, productivity and comfortability high.
5. Timings Can Be Well Planned And Managed For A Flawless Transition
Likewise to reason number four, the use of a robust FF&E plan allows you to organise and plan the timings of order and delivery of new items. Also, for the more complicated fixtures, the removal of existing and installation of new items can be planned properly.
Executing this properly means that there won’t be any downtime whilst your business is without important FF&E items or having to incur additional costs for rejected deliveries or putting items into storage. All of this can happen when items are ordered without proper planning and management, but a proper FF&E plan helps avoid this.
6. Can Be Outsourced To A Third Party
If management of FF&E is an expense of time that your business cannot afford, you can always pay to outsource the whole process to a third party. Either a freelance FF&E specialist Project Manager or specialised agency will be able to manage all of your FF&E management (planning, ordering, organising, etc) for a fee.
Depending on your business’ circumstances, this may be more cost effective than trying to manage it yourself and either incurring additional costs due to errors (such as under/over ordering) or the by-product of incurring costs in other areas as you spend more time managing the FF&E process than what is advisable.
7. Helps To Ensure You Can Choose What You Prefer
Rather than having to rely on what is available when you suddenly need new FF&E items, having a preemptive plan in place means that you should be able to choose from the full range of products within your budget.
This means that you can order and install the items you actually prefer, making sure your FF&E works for and suits your business, as opposed to taking a “make-do and make-it-work” approach.
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