Want to increase your profit margin? Want to reduce your overheads? Want to get cash incentives from utilities? Want to be doing the right thing for the environment? Of course you do! Most business owners and hopefully most employees would answer yes to those questions.
Ok. So why is it that 90% of businesses we walk into with our energy consulting hats on could save 30% or more on their annual bills? Big business, small business, it’s the same everywhere. And it’s basic standard stuff that’s not being done, like changing the lights and switching things off. Most businesses don’t pay much attention to their energy usage and costs. And that’s a shame because it means they’re missing a great financial opportunity.
I’ve been helping businesses save energy for over twenty years and I know what’s stopping you. I’ve heard all the excuses I haven’t got the time, I haven’t got any free cash, we’re too busy doing project X, we’ve already done it, I don’t think there’s much to save, my energy costs are small compared to my wages or raw materials costs. And my favourite energy’s cheap here in BC (and that from a senior executive at an industrial site with annual energy bills in excess of $1 million).
I understand, you’re busy doing what you do, making what you make, keeping customers happy etc. I’m not saying give up your day job but I think we all need a different perspective. Consider this if you could reduce your energy costs by 20%, what would you need to do instead to have the same benefit to your bottom line. Take a deep breath and we’ll look at some numbers.
Let’s say your company has total annual sales of $20 million, a profit margin of $2 million (10%) and your annual energy costs are $1.6 million (8%). If you have a guaranteed cost effective way through energy saving measures to reduce that $1.6 million down to $1.3 million (19% savings), your profit margin becomes $2.3 million (11.5%). Or put it another way, you’d have had to sell another $3 million of goods or services to have the same effect. Perhaps to do that you’d need a new product line, more sales staff, increased levels of marketing or more advertising. Let’s face it, none of these come free or are guaranteed. And if your profit margin was only 5% you’d have to sell another $6 million to have the same effect. Need I go on?
Well perhaps I do need to go on because it’s not happening out there. Throw into the mix that energy costs are only going up; BC Hydro promised us 28% increases over a 5 year period and natural gas costs are historically low at present. Add in that maintenance costs are reduced when you run equipment less and in a more controlled way. Consider that you can promote your green program on your website and everywhere else. And don’t forget utilities want to give you money to help.
Finally, there are companies out there who will do it all for you from start to finish so you really don’t need to give up your day job. And there are finance companies that can set up a lease to owncontract with you so you can spread the costs over a number of years. In many cases the energy savings can outweigh the costs of the lease so the whole deal is revenue positive. So you get it all done for zero net outgoings plus some cash each month!
So really, what is stopping you?
Why is it that 90% of businesses we walk into with our energy consulting hats on could save 30% or more on their annual bills? Big business, small business, it’s the same everywhere. And it’s basic standard stuff that’s not being done, like changing the lights and switching things off. Most businesses don’t pay much attention to their energy usage and costs. And that’s a shame because it means they’re missing a great financial opportunity.