Reliability improvements usually pay for themselves
Reliability and maintenance improvements often have very good payback in cost savings, revenue gains as well as other risk reductions. The more reactive your working environment, the greater the potential for payback.
You need a business case
Even with a great business case, big savings, big revenue opportunities and relatively low costs to make the improvements, many operations will struggle to pay for the improvements from their budgets. They may not even have a budget and forego any action until later years when the budget can be approved. Sadly, that leaves a lot of money on the table!
We can help with the business case, identifying the size of the prize – cost savings, potential revenue gains and areas of risk reduction for the business. We can also help with financing the initiative, often with money generated by the improvements.
Confidence is needed
Your initiative will require some level of spending to get it started. If well crafted, it can produce quick wins and early payback. Working with us, we structure the improvement activities to provide payback in the first year, often exceeding project costs. But that alone may not be enough to release constraints of having no budget for the work.
You end up leaving money on the table. How crazy is that?
You need confidence in your ability to pull it off and get those quick benefits. You also need that confidence to be evident to those holding the purse strings. Overly conservative accounting and general management at your site may demand that you have a budget approved before you proceed, but what if you can show them how it is paid for without touching existing budgets?
Act like a CFO! Find money outside the budgets
Executives in finance tend to be good business decision-makers and they can find money if they have something to sell. Present them with an opportunity that has high payback potential, and they will be supportive. Likewise, senior operations executives who look at the bigger business picture can be strong supporters. Your message about your improvements and the benefits needs to get to them.
What better than to show big savings, big revenue gains AND the means to pay for it all out of project earnings?
Our Financing Solution
When we are working with you, we bring along our financing program if you want it.
We are teaming with an established financing company to provide customer project financing. Yes, we actually find you the money needed to pay for your improvements. It works somewhat like a line of credit set up for the project. Money is made available right at the start and repayment of that money can be deferred until the project begins to show returns. Those repayments can be kept small and below the financial benefits, you will be receiving from the improvements. Repayment becomes easy to budget knowing it is covered by those benefits.
Existing (and future) credit lines are unaffected and you can get favorable tax treatment for the payments you will make to repay the financing. Your finance people will like the control over the terms, payments, and timing that this provides.
Once we’ve talked about your project and its potential, then we are happy to bring our financial team to the table to discuss project financing.