Top Business Energy Expenses
Running a small business can present a number of challenges and obstacles, one of them being how to manage and
Running a small business can present a number of challenges and obstacles, one of them being how to manage and
Running a small business can present a number of challenges and obstacles, one of them being how to manage and maintain low overhead costs so that you can increase or maximize your profits.
Well, since many business owners are faced with this problem, let’s talk about it.
If you were trying to reduce costs and increase your profit margin, what are some of the first things you start to review and cut?
Because most small business spend a lot on payroll, staff payroll is usually one of the first things that gets cut when reducing expenses. After that, it’s things like insurance fees, rent, marketing, and even building maintenance and repair fees. Basically, anything else that you “don’t absolutely need” or that “you can probably do without”.
But what about energy?
Because you can’t just turn off the lights, energy is often overlooked as a way to reduce your monthly budget. Yet most small business spend a large portion of their budget on energy and depending on the industry you’re in, energy can consume up to 30% of your operational costs.
Think about it, how much are you spending on electricity or natural gas every month?
The truth is, today there are many things you can do to lower your energy costs. And no, we’re not talking about switching to candlelight or turning off your air conditioner in the middle of summer.
Also, reducing your energy consumption not only puts money back into your bottom line but it helps the environment. The less energy you use, the less energy the grid has to produce by burning offers fuels.
So, the million-dollar question:
Before we answer that question, let’s take a look at what things consume the most energy in most businesses. Knowing this information, you can start to do things that will immediately reduce costs.
Light Bulbs
What’s one of the first things you do when you arrive to work in the morning? Turn on your lights? And what’s one of the last things you do when you leave? Turn off your lights. Being on all day, your lights can consume a lot of energy and tend to be on of the top three energy expenses for small business.
So, what can you do?
One of the fastest ways to reduce your lighting costs is to install LED light bulbs. The average small business has about 50 light bulbs. If your small business is using 60-watt light bulbs, that adds up to 3,000 watts every hour. Swapping out your lights for LED light bulbs, you would get the same amount of light for 475 watts each hour. In a month, you would be saving over 600,000 watts and be paying a lot less!
If you already have LED light bulbs, there are more things you can do to lower costs. Maybe there are some rooms or spaces in your office that don’t get used all the time and so they don’t need to have the lights on all day. Installing motion sensors that automatically turn the lights off when no one is in the room can help reduce costs. Opening blinds and taking advantage of day light when it’s not too hot outside can also reduce costs.
HVAC
Like lighting, most small businesses have a central air conditioner or heating system that runs all day to create a comfortable environment for both clients and employees. Unfortunately, many small businesses are operating with old and outdated HVAC systems that increases costs in two ways:
An HVAC system that is more than 10 years old can cost your business more than 20% of your cooling costs. Being full of moving parts, older HVAC systems may have rusty components, clogged filters, dirty ducts, and many other things that will make the system operate less efficient.
Newer HVAC system are built with energy-efficiency in mind, using new technology that helps the system provide better cooling or heating while conserving energy. If you’re business’ HVAC system was built in the 1970’s, you could reduce your energy costs by up to 50% by replacing it with a new and energy-efficient model.
Space Heaters
Many businesses use space heaters thinking that they cost less then central heating. Unfortunately, it’s rarely the case. Be at work or at home space heaters are actually some of the most expensive appliance that you can run.
Let’s take a look at it. If you run a space heater for 8 hours in a day, that one space heater is going to cost you about $36.50 a month. As most offices require more than one space heater to obtain a comfortable temperature, space heaters start to quickly rack up energy costs.
Computers
While computers are vital to any business, have a look at your office computers and answer this question: am I actively using every computer? For most business, the answer is no.
A desk top computer uses about 300 watts every hour. If you have 5 computers that aren’t being used, that adds up to 1,500 watts every hour. In a month, that starts to add up. Even while you’re not using it, it still uses power. A laptop computer only uses about 60 watts per hour when plugged in, and zero energy when it’s not plugged in. Here are some things you can do to reduce computer energy consumption:
1. Turn off computers when not in use.
2. Turn off computers when done for the day.
3. Use lap top computers where possible.
4. Only plug in lap top computes when they are charging.
The Copy Machine
While copy machines are very common, they are one of the most energy consuming appliances an office has. Copy machines use a lot of energy, even when they are in sleep mode. The average copier uses 2,400 watts when actively copying, 310 watts when on standby mode and 200 watts when on sleep mode. Turning your copy machine off at the end of the day or when not in use can save you money on energy.
The Break Room
Believe it or not, microwaves, toaster ovens, and mini fridges play their part in high energy bills each month. A fridge can use between 100 and 250 watts in an hour. While microwaves and toaster ovens use more but don’t’ run all day. While a break room is probably not something you can do without, you can purchase energy star rates equipment that can help you reduce the amount of energy used by your break room.
Monitors and AV Equipment
Many offices and businesses have monitors and AV equipment that is not used all day. Often, these monitors display a screen saver while not in use and even if turned off still use energy. The best way to manage this equipment is to plug them into a power strip and turn the power strip off when they are not in use.
While energy is a vital part of your business, there are many things you can do to curtail energy costs and reduce power consumption without it impacting your business’ growth.
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