If you have done your research and (wisely) decided that installing a mezzanine is going to help your company solve a raft of problems, you may still have to present a compelling business case to the Board.
This guide should help.
The business case for a mezzanine
When putting together your business case it is useful to group your thoughts under the following headings:
- Show why things need to change
A mezzanine allows you to find the space your business needs when you’ve outgrown your current premises, you’re diversifying or you simply need to maximise capacity. A mezzanine floor can double, triple, or quadruple usable space, and can be engineered to take any load. Hi-Level Mezzanines installs a range of bespoke mezzanines, from Amazon distribution centres to the clinical demands of medical facilities.
If your business operates a warehouse, you may find the cost of moving to a bigger site prohibitive. With a business rates re-evaluation announced last autumn, the amount paid by large distribution warehouses will rise by a grim 27%, while total business rates paid by the retail sector are estimated to fall by 20%. The UK Warehouse Association has rightly branded this ‘unfair’. The alternative is to create more space upwards with a mezzanine rather than expanding sideways.
Working at near full capacity is counter-productive when it comes to space. Once warehouses reach 80% to 85% space use, efficiency of movement and storage drops, according to data gathered from 200 3PL warehouses for 3PL Central’s last Benchmark Report – and 15% said they were actually operating beyond 100%.
- Explain the Return on Investment
Putting up a mezzanine is far speedier and more cost effective than moving and setting up from scratch.
On average, warehouse construction costs for a large distribution centre come in at around £72 to £90 per square foot, whereas a warehouse mezzanine costs around £7 to £11 a square foot, according to Checkatrade.
If you wanted to double your space, a 16,000 square foot warehouse is going to be far more expensive than 8,000 square foot with a mezzanine
The costs of relocating to a bigger space are escalating. Vacancy rates in the Golden Triangle, for example, have hit record lows of under 2%, compared to 7% a year before, according to research by Knight Frank reported in LogisticsManager, with consequent pressure on prices.
Mezzanines also add value to your property despite the upfront investment, putting your business in a stronger position in the long term.
- Show how everyone will benefit
Using overhead space that would otherwise be wasted can maximise productivity at a fraction of the cost of moving to new premises.
Having additional storage space on a mezzanine prevents supply chain disruption. Hi-Level has installed a three-tier mezzanine for Tesco in Daventry, totalling 23,000 m2 for automated garment hanging storage.
A mezzanine can be used for manufacturing, storage or as additional office space and a canteen as production increases.
Staying in your current premises rather than relocating helps retain staff who might prefer not to travel, keeping your experienced workforce in place.
Remaining in situ with a mezzanine avoids upheaval to your logistics planning, as well as less disruption for suppliers and customers; it also avoids the costs of moving a warehouse full of stock to new premises.
A mezzanine can increase safer working, as our superbike client GB Racing found: “In addition, the mezzanine has allowed for safer and more efficient operations … with parts kept in racking being accessible from standing (without the use of ladders) and wider staircases for easy transport of packages between floors.”
- Show the logic behind your case
These examples show how Hi-Level clients have benefitted by expanding in their existing space thanks to a mezzanine, rather than moving:
- Show how a mezzanine is aligned to your goals and vision
Installing a mezzanine is a brilliant way to futureproof your business by creating more space you can expand into as and when you want to. It can be tied into your long-term growth plans as the Hi-Level team will work with you in detail to understand where your business is heading and give you the best advice to suit your needs.
Multi-tier mezzanines provide the flexibility to move onto one floor now but benefit from efficiencies and minimise future disruption by installing extra space you can use later, spreading the cost in phases.
The case of our bike share client Beryl sums it up nicely: “One of Beryl’s established schemes is in Watford and while their existing unit allowed enough space for this operation the plans for business growth meant more space was needed. After considering relocating their operation the upheaval of moving and expenditure of a larger premises did not seem cost effective but making use of their existing space by installing a mezzanine floor seemed the perfect solution.”
Hi-Level Mezzanines provides mezzanine floors of the highest quality in the industry, yet remaining competitively priced thanks to the expertise of our team of qualified structural engineers, innovative digital design process and advanced solutions.
For 30 years we have been creating space for amazing things to happen. Contact us today for more information at [email protected] or call 01730 237 190.
