Ocala.com Bloggers
- Broken News
- Bill Thompson
- Digital Editor
- Eric Barnes
- Frame 37
- Ocala.com Multimedia
- Marion Politics
- Newsroom
- Observations
- Naseem S. Miller
- OcalaDay
- Joe Byrnes
- Read My E-Mail
- Allen Parson
- Running Wide Open
- Joe Vanhoose
- Speaking of Business...
- Dr. Philip R. Geist
- The Bowling Blog
- Debbie Whitten
- The Green Zone
- Dave Rhea
- The Sports Blog
- Gregory Broome
- What is that?
- Newsroom
 |
Search Blogs
|
 |
|
|
|
|
Blog Archives
|
|
|
|
|
|
|
Is your energy level up to par?
|
|
|
|
|
|
|
Location: Blogs Speaking of business..." |
 |
| Posted by: Dr. Philip R. Geist |
4/17/2007 8:46 AM |
To maximize profits, your energy level (usage) should be DOWN to par! Reducing energy and other expenses can boost profits more easily than raising sales...
Consider for this example that in your business you have a pre-tax profit of ten percent, that is, for every dollar in sales, you make ten cents in profit. We'll make the assumption that your average sale per customer is $20. Also consider that your total energy costs per month average $1,000 per month.
To boost profit $200 per month you would need $2,000 in additional sales ($2,000 times ten percent), which in turn would require 100 new customers. Obtaining new customers would require additional advertising or promotion and its related expenses. That would reduce the profit margin below ten percent and require even more customers to provide the additional $200.
An energy savings of 20% monthly would achieve the same results! Does 20% sound high? Does your business have programmable thermostats or do you depend on employees to turn the a/c down or off when closing? Have you ever opened on a Monday and found that the a/c was running at a daytime setting all weekend? If you use hot water in your business (carwash, drycleaner, factory process, restaurant, etc.) so you recapture a/c waste heat to pre-heat it? How about solar hot water? In residential usage, water heating accounts for about 25% of the energy bill. In commercial settings that use hot water, that number can approach 60%!
When we speak of energy costs, fuel for delivery vehicles is included. Do you schedule deliveries to minimize "deadheading" and multiple trips across town? Are your vehicles tuned up? Do you have a bulk fuel purchase agreement if you have a small fleet of vehicles?
Other non-energy expenses you can reduce, like office supplies, also flow directly to the bottom line. The lesson here is that "A dollar saved is an ADDITIONAL dollar of PROFIT.
Do any of you who are minimizing expenses to maximize profits have some other ideas to share? |
|
| Permalink |
Trackback |
|
|
|
|