Cutting Costs One Kilowatt At A Time
Small business owners always need to be alert to cost cutting measures which do not reduce the quality of their product or their ability to service their customers. In a day when fuel costs are approaching record highs, conserving energy has become one of the more practical ways of doing that for some business owners.
An Associated Press report which appears on msnsbc.com tells the story of some business owners who are doing just that. Here is some of what it says–
The lights go out at night after the last wash at Jim Whitmore’s five coin laundries — no longer does he use a fully lit store as advertising. And at Todd Waldemar’s Wing Zone store, he’s shutting down some of the fryers during off-peak times.
Small business owners are getting pinched by the soaring prices of oil, gasoline and other fuels, eating into their profits as they gas up vehicles, heat and cool their premises and run machinery. Often, they turn to common sense solutions to save energy and money….
Small businesses have had to become creative and smarter to cut energy costs. Companies that do a lot of deliveries as part of their business — florists, for example — have been reducing the number of delivery runs they make each day. They’re also using mapping software to find the shortest routes, and making sure vans and trucks are filled as much as possible to capacity.
Many that consume a lot of energy buy contracts ahead of time to get oil or natural gas at a set price. And many business owners invest in more energy-efficient machinery or switch their heating systems to wood or other alternative fuels from oil or natural gas.
Whitmore is in the process of replacing his washers and dryers, and is searching for machines that will use less energy and water, reducing his costs over the long term. He sees a side benefit of going greener: By advertising that his laundries are more environmentally friendly.
“Hopefully some of it will flow to the bottom line and help pay for the new equipment,” he said.
At Ranch Rudolf, a resort in Traverse City, Mich., owner Sid Hamill has replaced most of his heating system with a wood-burning furnace. He estimates it’s saving him between $10,000 and $12,000 a year in fuel costs.
Since his business is located on 195 acres of land, he cuts most of the wood he burns from his own trees.
“The wood works well for me,” Hamill said, and estimated that the new heating system “basically has paid for itself….”
Rising energy costs are forcing some companies to shorten their operating hours — a sacrifice in particular for restaurants that pride themselves on being open 24/7.
Phil Greifeld, chief executive officer of the Huddle House restaurant chain, said the company is allowing its less-profitable franchisees to close at midnight, although Huddle House has advertised itself as “always open, always fresh, 24 hours a day.”
“There was a lot of internal debate about it, but it’s a good thing we did that in terms of helping people to control their costs,” Greifeld said. The result: Those restaurants that are closing at midnight are making more money.
Other steps Atlanta-based Huddle House is taking include reconfiguring its seating arrangements, to allow restaurants to accommodate more customers and increase their volume. The company, which has 440 restaurants in 17 states, is also working with equipment manufacturers on burners that turn the gas on when a pan is placed on the stove and turn it off when a pan is removed.
“It really does add up” in saving money on energy, Greifeld said, and added about cutting costs, “it’s something you have to work on day in and day out.”
While businesses try to cut costs as much as possible, most are ultimately forced to pass some of the higher energy prices on to customers. Delivery charges are going up, manufacturers are repricing their goods and restaurants are raising their menu prices. Generally, small business owners say their customers understand — energy prices are going up for them as well….
Some energy saving measures work better for some businesses than others. In addition to saving money and maintaining a high level of customer satisfaction, you need to be mindful of the safety of your customers and employees. Some businesses have chosen to reduce lighting at night time. While that may save money, it also poses a safety risk for any employees who may be closing for the night as well as any customers who may be lingering past closing time. It also greatly increases the likelihood of vandalism or costly break-ins. So, not every step you can take is good in the long run. But if you will look into the culture of your business and take measures of energy conservation that make sense for you, it will decrease some of the hidden costs of doing business and increase your bottom line at the end of the year.
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