If you are working with slim profit margins or incoming cash flows that are intermittent and inconsistent, then effective cost control should be a top priority. But where do you even start?
We all know that the costs of health insurance, commodities, and the average small business tax burden have been big profit eaters over the last few years. But what about your utilities bills? At the end of last year Shoeboxed.com put out this infographic based on a survey of over 12,000 small businesses. One of the key findings: utilities bills had doubled for small businesses in the first half of 2012.
When it comes to cost reduction, many small businesses owners may simply be unaware of the savings that can be achieved in this area- often with little effort or investment. The truth is, however, that you can save literally hundreds or even thousands of dollars a year by introducing a few small changes to your business, and this applies even if your business location is a small home office.
That said, here are things you can do immediately, many of them for low cost, to realize a significant savings in your utilities expenses.
1. Conduct an energy audit. An energy audit is simply an inspection of your business (or home if that is where you work) for ways to shrink your utility bills, typically by eliminating unnecessary usage. You could perform a simple energy audit yourself by looking for air leaks (open space around doors or windows), checking insulation levels, calculating light bulb wattages and checking and changing filters in your heating and cooling units. (Here's some info on a DIY energy audit.) You can also hire a professional energy auditor (if you work from home, then you can search for a professional auditor here), or call your utility company, since they may send an energy auditor to your home or business for free. Finally, you should head on over to ENERGY STAR website and sign up for the Small Business ENERGY STAR Network to take advantage of the free information and assistance they offer small businesses to help them conserve resources and save money.
2. Choose your utility company carefully. If you are in an area of the country that allows you to choose a utility provider, then take the time to research your options. There are many different providers and service and costs can vary extremely from one option to the other. You could start to search for different rates and plans available in your area with online comparison sites like ElectricChoice.com and WhiteFence.com. For my readers in the UK, there's Energy Helpline.
3. Look for business-friendly rate plans. Many commercial electricity providers are targeting business customers by offering business-friendly rate options and other features. Business customers can opt to pay different rates based on when they use power or to get paid for using less power during certain peak periods. But, perhaps the biggest feature to look for, is the use of the SmartMeter system. This system allows you to view your hourly electric and daily gas energy usage data, meaning you can find out exactly how much energy you are using over the course of the day, week, or month. With this data, you can then alter your energy usage and/or payment plan to suit your needs.
4. Invest in a smart surge protector. Turning off office machines and equipment overnight and when not needed will definitely conserve energy, but not as much as you think. Some appliances and electric devices use power even when they are turned off. It's called the phantom load. Here's a chart the shows the average power consumption across different devices even when they are turned off. The best solution to this is to invest $25- $30 dollars in what's known as a "smart" surge protector. These devices will cut off power automatically to only the devices that are turned off, while still powering the devices that are turned on and in use!
5. Change incandescent bulbs for CFL or LED lighting. If you are still relying on incandescent bulbs, then you can achieve significant savings just by switching to CFL or LED lighting. LED lighting in particular can bring the biggest savings, even over CFL light bulbs, because they last longer, use less energy, and are relatively cheap.
6. Buy energy-efficient equipment. If you're working with a tight budget, then buying energy-efficient equipment may not be a top priority; you may be more focused on the price tag. But the truth is, energy efficient equipment is not always more expensive, and even where it is, you can typically recover your investment through utility bill savings within five years. Just make sure you search through the ENERGY STAR product database whenever you are ready to buy equipment.
7. Seek out incentives on appliances. You can take advantage of energy efficiency tax credits, rebates, and state incentives. Many state and local governments and utility companies offer financial incentives for both homeowner and businesses to upgrade their equipment to newer, more energy-efficient models. These incentives usually take the form of rebate checks for those who can provide proof of purchase. You can check for government and utility deals in the Database of State Incentives for Renewables and Efficiency. In addition to this Retailers and manufacturers are eager to catch shoppers' eye, offering mail-in rebates and big sales.
8. Install a digital thermostat. Heating and cooling your business or home office can get expensive- especially if you live in a part of the country with extreme seasonal temperature changes. To ensure that you are optimizing the use of your heating and cooling system, you can purchase a digital thermostat and program it so that the temperature in your business stays within a given range or have the system automatically turn on and off to match activity in the space. Advanced devices may cost about $200, but many decent thermostats sell for less than $100.
9. Odds and ends... Adding caulking and weatherstripping to drafty doors and windows is one of the easiest and cheapest ways to reduce your energy bill. This is because you are letting outside air directly into your business or home office through cracks around doors and windows, causing your heating or cooling unit to work harder to keep the space at a comfortable temperature.
10. Another point.. When you change your HVAC, instead of buying disposable filters spend a little more (about $20) to get a reusable filter than you can simply hose off when it gets clogged up with dust and other particles.
Bottom line: No matter what your business setup or situation, there are many simple ways to save on your utilities bill. So what are you waiting for? Start saving today.