Image courtesy of bplanet at FreeDigitalPhotos.net
The fastest way for business owners to see a significant improvement in their bottom line is to reduce operating costs, which is easy to accomplish through energy efficiency upgrades. Electricity continues to be the 2nd or 3rd highest expense for many companies and improving efficiency measures can decrease energy expenses by 40-50%. This savings drops straight to the bottom line and can translate into a 3-7% increase in profit margins. Add to that the utility rebates and tax incentives currently available, business owners who implement energy efficiency upgrades can see a payback within 2-4 years while also greatly improving the look and feel of their site.
Increase profit margins without increasing revenue…it’s possible!
Trying to raise profit margins by increasing sales is a slow and arduous process. It takes a long time to produce measurable gains because an increase in sales also means higher overhead costs. By reducing only one of those overhead costs, energy spending, it’s possible for your business to experience a significant bottom line improvement without any increase in revenue. Consider the following example:
Say your business operates at a 5% profit margin and you are exploring energy efficient upgrades that will save you $1000 annually. In order to achieve that same $1000 savings through sales alone, your business would need to earn another $20,000.00 in revenue ($1000/0.05 = $20,000).
Due to the large utility rebates and tax incentives, your business can experience tremendous savings in under 2-4 years without losing sleep over increasing sales. But the benefit of energy efficiency upgrades doesn’t stop here. By simply telling your customers about your new “green” endeavors, an increase in revenue will come quickly.
Fringe benefits of energy efficiency upgrades
In addition to improving your bottom line, energy efficiency upgrades can benefit your business in a host other ways. In fact, researchers have come up with a list of 224 non-energy benefits associated with improvement measures! For instance, while you might feel good about taking steps to reduce your carbon footprint, your customers will feel even better about doing business with you. According to the EPA, 68% of adults prefer to do business with companies who are environmentally responsible, which means your new enhanced image will help you to gain a competitive edge in your industry. Other indirect energy saving benefits include; improved employee productivity, increased customer comfort, reduced operations and maintenance costs and increased asset value. The EPA also estimates that for every $1.00 invested in energy efficiency, property value increases by approximately $3.00.
It’s clear that energy efficient upgrades can have a dramatic effect on your bottom line – so what’s stopping you? Implementing efficiency measures is a low-risk investment as you can easily determine your savings through an energy audit and your quick payback will happen regardless of your sales volume. With such large rebates and incentives, the multitude of indirect benefits that can increase your sales, and companies, like EES Consulting, who specialize in customizing recommendations to meet the specific needs of your business – WHY NOT GO GREEN IN 2015?!