It’s common for both public and private institutions to set ambitious goals. However, long-term economic development rarely happens by accident. To be most effective, this process requires forethought, strategy, and careful attention to financial details. Many local and commercial organizations implement a capital improvement plan primarily for these reasons. These proposals serve to keep elaborate, large-scale projects on track and moving forward over time.
Capital Improvement Plans
Organizations looking to make informed financial decisions often employ a capital improvement plan (CIP). This encourages them to map out priorities and take advantage of critical opportunities in the coming weeks, months, and years. CIPs provide clear guidance on what is needed for a project, why and when it matters, and exactly how it will be funded.
CIPs serve a wide variety of purposes. These fiscal management tools generally aim to coordinate the timing and funding of major, unique expenses. Depending on the organization’s precise needs, their CIP may involve the sale, lease, and development of things like land, infrastructure, specialized equipment, and commercial real estate.
These plans are often working documents subject to change as priorities shift and challenges arise over time. However, they usually establish long-term timelines ranging from 4 to 10 years. CIPs identify valuable opportunities, schedule developments from most to least important, estimate and justify financial allocations, and detail essential organizational partnerships.
Who Benefits from These Plans?
Both public institutions and private organizations use CIPs for similar reasons. They’re helpful for those responsible for city planning, economic development, and the efficient use of public funds. CIPs also support entrepreneurship, business development, and countless commercial property improvements.
CIPs are often associated with community planning. Local officials at the city and county level generally prepare a CIP alongside their annual budget. This allows them to create a clear strategy for capital improvement over a multi-year period. City planners tend to outline repairs of aging infrastructure, renovations of parks and public utilities, and the zoning and development of school districts.
CIPs also serve to increase the market value of commercial real estate. Property owners and managers use them to create a precise timeline for long-term, permanent improvements to their assets. They often establish a process for undertaking and funding valuable upgrades land, buildings, equipment, utilities, and critical infrastructure. These commercial CIPs may be used to expand a development, prolong a property’s lifespan, update a structure’s functionality, or replace outdated and inefficient utility equipment.
Capital Improvement Plan Best Practices
These plans outline a precise strategy for achieving ambitious, long-term goals. By working with an experienced CIP specialist, organizations can streamline the improvement process while reducing setbacks and unnecessary expenses. If you want your CIP to come together as well as possible, then focus on the following best practices.
- Begin by listing and explaining any project’s purpose, description, and justification.
- Set a clear list of priorities in terms of which aspects are most important at every turn.
- Establish a strategy for managing both in-house funding and external financial contributions.
- Create a schedule for each stage of the project and maintain strict deadlines.
- Conduct a complete inventory of all current assets and fixed assets as they relate to the project.
- Indicate whether all expenses are capital expenditures or traditional maintenance costs.
- Partner with an experienced professional advisor to avoid mistakes, make strategic changes, and keep you accountable throughout the entire process.
Ask Us about Capital Improvement
Creating a capital improvement plan is often an afterthought, especially for property owners and managers. However, without a clear plan, you risk losing key opportunities, missing crucial deadlines, and wasting valuable resources over time. If you’re looking to create the best capital improvement plan for your organization, then please consult our team before you begin. We’ll discuss your unique goals and needs before outlining a clear path to improve your commercial development.