Here is a Guide to Activity-Based Space Planning for the Office

1. What is your business’s core product or service?
2. What are all the resources you need to deliver that product or service to clients, while meeting all the benchmarks of the highest quality possible?

If you can answer those two questions completely, then you are on your way to engaging in Activity-Based Planning or ABP. ABP is part of a larger business strategy known as Activity-Based Costing in which a pricing formula for goods and services is calculated based on the value of all the resources required to create that product or service and deliver it to the end user.

With the information from gathering this kind of data, managers and entrepreneurs can determine if producing that product or service is actually in the best interests of the company or if the costs of production limit profit potential. 

Human resources, including time spent training or educating experts, is just one expense. Energy usage, wear and tear on equipment, taxation and administration costs, as well as facility creation and maintenance are all part of the formula.

ABP is as essential a strategy for sole proprietors and small businesses as it is for large-scale manufacturers. 

The True Cost of Business Space

One of the often-overlooked, or over-simplified, elements of ABP is the use-of-space costs required to conduct business. While most entrepreneurs have a general idea of how much it costs to keep a home office and how to calculate wear-and-tear on computer equipment and office furniture for tax reporting purposes, few have an idea of how these expenses contribute to the costs of providing their services to clients.

Here are some points to consider

• There may be seasonal variations in your business space costs. Gas heating in winter, for example, is often cheaper than air conditioning powered by electricity in summer. Periods in the spring and autumn, when no heating or cooling is required, require less investment in business use-of-space.  If you have clients who use your services only during high-energy cycles, this should be reflected in the fees they pay.
• Beware of the labour costs associated with use-of-space. If you use flexible space, such as pay-by-the-hour commercial business centres or co-operative co-work spaces, the time the company spends researching, touring and contracting these facilities is also a spacing cost that has to be passed on to clients. A meeting room rental may only cost between $30 and $75 an hour, but the time spent vetting, booking and traveling to the space, as well as any cleaning or maintenance fees, are also part of your service costs.
• You may not be calculating the full cost of equipment.  All copiers will produce their share of poor quality photocopies. Ink cartridges, tech support, cleaning and maintenance of printers and computers, are all part of the expense of doing business and have to be linked back to the cost of production.
• Think of the environmental impact. Companies, whether they are large or small, can no longer ignore environmental issues. As a result, activity based planning and costing are being traced back to the costs of the environmental impact of the core business activity and the cost of repairing or off-setting damage to the planet. Up-cycling, re-cycling and re-purposing are three activities that can off-set the environmental costs of doing business.