Blog

Finding Hidden Costs in Your Business

The Business View – April 2017 / Small Business Corner

 

You work hard to make money. Wouldn’t it be nice to hold on to more of it? An ongoing challenge for many small business owners is determining when operating costs are too high.

 

Consider expenses that are often taken for granted: the cost of electricity for lights and air conditioning, natural gas for heating, fuel to keep delivery vans or service trucks running, and water for restrooms or landscape irrigation. Until recently, it’s been difficult to see what factors are driving these expenses and by how much.

 

The good news is technology is pulling back the veil on these hidden costs. Products are now available that can help you track where, when and how much of these resources are being used, identify opportunities for savings and, in some cases, adjust systems automatically to optimize usage.

 

These new connected solutions fall into a category often described as the Internet of Things (IoT). They use sensory technology to assess what’s happening in your business, connect to the Internet through a secure link to upload and analyze data and help you more efficiently manage what’s being tracked. And many of these solutions are more affordable than you might think.

 

Examples include smart windows that adjust to the sun and weather to help reduce indoor heating, cooling and lighting expenses up to 40 percent; vehicle solutions that can reduce fuel purchases and idle time as much as 15 percent and 50 percent, respectively; and intelligent irrigation systems that can reduce water use by up to 50 percent.

 

Since many small businesses operate on a thin margin, these savings can make a big difference.

 

If those businesses could save $10,000 a year on energy bills, it may not seem like much. Consider the alternative, though: Each retailer would have to sell more than a quarter of a million dollars in product annually to match those savings. And while further increasing sales requires perpetual effort, these cost savings recur based essentially on a one-time investment.

 

Deploying smart technology in your business can be a smart move. It can reveal hidden costs and help you gain a competitive edge through improved operating margins.

 

This column was written by Darren Beck, the senior director, corporate membership for Sustainable Brands and author of “Smart Business: Gaining an Edge Through IoT-Powered Sustainability.” He can be reached at dbeck@sustainablebrands.com.

 

 

Click here to read The Business View – April 2017