Planning a budget for anything can be an arduous task. When planning a budget for a branded environments project, there are even more factors to consider. Here’s a helpful outline to help guide your process for budgeting for a Branded Environment.
It’s definitely not a “one size fits all” type of process!
Defining the branded environments project goals and scope
Many times our clients are not able to tell us their budget at our initial meeting. And not because the client is hiding the budget – it’s because the client truly doesn’t know yet how much to spend or what to include in the project.
Defining the project is usually an iterative process. In our first meetings there is a lot of discovery of goals, desired outcomes, and which management areas are driving the project.
In subsequent meetings we discuss design possibilities and best practices. While some clients have a clear understanding of what they want, many clients rely on us to educate them on new workspace design trends.
As our clients gain a firmer understanding of how they can better attract talent, increase productivity and cultural buy-in, and boost innovation with branded environments, they then feel more comfortable setting a budget to invest in achieving these goals.
Reactive versus proactive budgeting for branded environments
A key factor in budgeting for your branded environment is whether your project is reactive or proactive.
We often get called in to help address an urgent need in response to an acute demand from upper management. These reactive projects tend to have smaller potential budgets – there simply isn’t enough discretionary funds left over after the company’s strategic budgeting cycle is done.
But when a project is planned for in advance, there is more opportunity for stakeholders to make their case for more substantial investments, and to tap capital budgets or budgets from one or more departments. Being proactive in this regard is often helpful, as it allows you to properly plan for your branded environments initiatatives long-term, instead of reacting to short-term needs.
Budgeting for branded environments over two or more years
Sometimes our clients want to build out all of the design elements that we proposed to meet the business objectives they shared with us, but they simply can’t afford to do the entire project at one time.
When the project investment is too big for one year’s budget, we prioritize the planned elements and divide the project into two phases of implementation (usually between different architectural spaces, such as lobby versus showroom). Then the project is paid for over two consecutive fiscal years.
However, for some larger, contiguous spaces, corporations can divide the project between two years by adding in the more expensive stand-alone and “nice to have” elements later. For example, we may begin Year One by installing the “need to have” millwork and graphic elements, and then return Year Two to install higher end AV elements, such as custom programmed touch screens or a multi-touch wall. Recently we engaged with a client to plan out a projected environment over course of several phases in a 3-year build out. Year one was an initial “Face lift” with rather minimal treatments upgraded furniture, and corporate branding elements. Year-two (or Phase II) was a gradual progression of continued branded materials and surfaces such as wayfinding and production area call-outs, and the final phase, in year 3 was an overall build out of an enhanced training center, complete with integrated technology to help guided tours of a facility, product displays, and other elements to help their facility “tell the story”. This proactive budgeting allowed for the client to effectively plan for costs and have the ability to front-load expenses if necessary if there was a budget surplus in that given year.
And budgeting can go farther than two or three years. Far-sighted executives plan for future changes in their branded environments, and include line items in their future years’ budgets for swapping in new graphics to keep their spaces fresh, for tech enhancements, or other future needs as mentioned above.
Which departments pay for branded environments?
Branded environments funding is often, but not always, driven by the department leading the project.
Marketing often takes the lead on their company’s branded environment initiatives, as brand is seen as a responsibility of marketing. And yet, marketing is not always the lead, and even when they are, funding sometimes comes from other departments.
Here are several other common scenarios:
- Facilities pays for much of the branded environment project, because even though marketing is leading, the work is done on the company’s buildings, which facilities manages.
- Facilities can also pay the cost of a branded environment when the work is integrated into a planned facility redesign.
- There is no set budget for a branded environment, yet the executive team wants it, so the funding comes from the general administrative, operations, or administration budget – or even the human resources or manufacturing budget.
- The branded environment is focused to support only one or two departments, such as sales and marketing (Reception Areas, lobby and break room wall graphics) engineering and product marketing (Effective product display areas) or human resources (recruiting meeting room), so those departments furnish the budget.
- The branded environment is broken down into its parts, and the budget is split according to the physical elements (facilities pays for wall graphics and custom millwork as building improvements, departments pay for furniture, and IT pays for technology and digital displays).
- The branded environment is seen as a long-term, depreciable investment, so it comes out of the capital budget.
- The budget comes from multiple department and functional budget buckets, for a blend of reasons listed above.
There is no best way to fund branded environments
What is the conclusion here? That there is no right way to budget for a branded environment, except what works for your company.
You may want to engage a designer upfront, design to where the solution meets your needs, and then seek budget approval to build it. Or, you can set your budget first, then engage a designer to fashion your vision, then build it out all at once or in multiple phases. Each project is so unique, there is no one path that fits everyone.
If your company is considering branded environments to help advance your key business goals, we’re ready to help you bring your story to life (whether you have a budget set already or not). To get started, contact Apogee today.