Wouldn’t it be nice to hold onto the money you work hard to make? Then, as a small business owner, you need to be able to determine when operating costs are too high.
There are a lot of 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. One of the most difficult factors to determine is what is driving these expenses and by how much. It’s very likely that your business is spending too much on these resources. But how do you pinpoint and control that excess when it’s invisible.
The good news is that technology is coming to the rescue. There are now products available that can help you to 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.
What I am referring to are the new connected solutions that fit in the 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 the data, and help you more efficiently manage what’s being tracked. You'll be happy to find out that many of these solutions are more affordable than you might think.
A free report from Smart Business is available online, where you can learn about a range of these IoT-enabled solutions associated with energy conservation, fuel efficiency and water conservation. The report provides each of these areas with a dashboard that makes it easy to visualize the initial investment, payback period, cost savings, and effort involved with installing solutions. Examples include smart windows that adjust to the sun and weather to help reduce indoor heating, cooling and lighting expenses to up 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.
Gaining a competitive advantage.
Since many small businesses operate on a thin margin, these savings can make a big difference. For instance, Sageworks (a leading source on industry data for privately held companies), reports that retailers like grocers, auto dealers, home furnishing shops, and liquor stores all have an average net profit margin of less than 3.5 percent. If those businesses were able to save $10,000 a year on their energy bills, it may not seem like much. But if you put it in perspective, those retailers would have to sell more than a quarter of a million dollars in product annually to match those savings. A quarter of a million dollars! And that one-time investment keeps producing those cost savings year after year.
Deploying smart technology can reveal hidden costs and help you gain a competitive edge through improved operating margins. That may make the difference between surviving or not in the world of small business.