Modernization and renovation in the office – How to succeed in the challenge!
Modernizing an office is fraught with financial hurdles. No matter whether heating, windows or flooring. We reveal tips for financing.
Ideally, modernization measures can be realized with equity capital. For many entrepreneurs, however, this is not or only partially possible. Without outside capital it often does not work.
Before credit requests are made, it is essential to carefully determine the expected expenses. In the following some possible measures were listed, which can serve as orientation and facilitate the preparation of a cost breakdown as detailed as possible:
- Replacement of the heating system
- Facade and interior insulation
- Renewal of sanitary installations
- Installation of air conditioning systems
- Acoustic room design
- Installation of modern floor coverings with impact sound insulation
- Modernization of lighting systems
- Electrical installations
- Installation of windows with thermal insulation glazing
- Wallpapering of the walls / painting work
In addition to the material costs, the personnel costs for craftsmen must not be underestimated. In combination, these costs add up to considerable sums. The exact price depends on the contractor and the insulation material used.
The modernization of a heating system quickly reaches the five-digit range. The same applies to new windows. Here, too, the costs add up rapidly.
Not to be forgotten: If an office has to be closed during the work and the workday cannot continue as usual, there may be a loss of sales. Depending on the scope of the modernization or renovation, two to four weeks can be expected.
In the case of larger projects, for example when extensions are added or the architecture of a building is significantly changed in another way, additional expenses for approval procedures, the creation of escape route plans or similar must be included in the calculation.
Determine budget and request cost estimates
To ensure that costs do not skyrocket and lead to debt, it is essential to set an appropriate budget based on the individual financial situation. Renovating, and especially modernizing, is desirable in terms of maintaining the value of offices, but it should not lead to financial distress. In case of doubt, the tax advisor can be helpful and provide independent advice.
Once the budget has been clarified, the scope of the project can be thought through and the materials selected. If the financial situation does not permit complete modernization, for example, measures are prioritized that have the greatest effect in terms of energy. For example, replacing heating and windows would be more efficient than replacing floors.
Cost estimates are required to calculate a realistic sum. While the majority of these documents contain only non-binding information, they still provide important guidance. Clients often have to reckon with an overrun of the final price in the case of non-binding cost estimates that become the basis of the contract when the work is commissioned. However, the deviation must remain within a tolerance range. In individual cases, overruns of up to 25 percent of the originally quoted price are conceivable.
The chances of obtaining outside capital for the self-employed are limited with banks. Fluctuating income and an increased financial risk compared to employees reduce the chances of success for a loan.
In addition, even the request for a loan involves a great deal of bureaucracy. The list of required documents ranges from business analyses, tax assessment notices and bank statements to annual financial statements and profit and loss statements. Compiling these documents takes valuable time, which entrepreneurs are reluctant to invest in view of the slim chances of getting a loan approval.
In addition, banks require collateral to compensate for a self-employed person’s lack of creditworthiness. Moreover, if a credit institution guarantees borrowed capital, entrepreneurs often have to dig deeper into their pockets than is the case with permanent employees or civil servants.
Potential borrowers do not have to convince a credit institution, but private persons of their project. For this a credit project is published on-line. If sufficient investors are found via the credit marketplace, the loan is granted. Loan amount and further factors are flexibly arranged and the bureaucratic expenditure is abgespeckt opposite the bank system.
In addition to credit marketplaces, it is advisable to check the conditions of credit offers on comparison portals. These virtual services facilitate the comparison enormously and accelerate the search for the right offer. However, since not all comparison portals include all credit offers in their comparisons, it makes sense to visit several portals to get an objective impression.