Uncontrolled energy consumption can silently eat away at your profits, impacting your bottom line more than you realize. However, CFOs would be glad to know that there are solutions that can help address these hidden costs accordingly.
We’ve compiled a list of action items your business can immediately implement to reduce the overall impact of these hidden costs. However, to apply these action items to their best effect for your business, we must first narrow down the possible areas of concern you zero in on.
True to their name, hidden energy costs are buried underneath the surface of general operations. What may initially be an obvious source of hidden costs may not be the root of the problem.
So, to help you zero in on the issues leeching on your business’s profits, here’s a quick list of areas you can immediately address:
One often-overlooked culprit eroding your bottom line is inefficient appliances and equipment. While the initial purchase price might seem reasonable, these outdated or poorly maintained machines can silently drain your profits through hidden energy costs.
In fact, these outdated appliances and equipment can waste up to 80% of a restaurant’s energy—causing your energy bills to soar.
Here’s a quick breakdown of how these machines negatively impact your business’s bottom line:
While breakdowns and repairs seem inevitable, a surprising number can be prevented proactively. This same number of preventable repairs usually reaches costs of about $28 billion per year for average restaurants.
Here’s how they contribute to such costs:
One area often overlooked is the impact of a lack of energy management systems (EMS) in your business. While the upfront investment might seem like an additional expense, the hidden costs of not having an EMS can significantly erode your bottom line.
An EMS is critical to safeguarding your business’s operations, as its absence can lead to the following issues:
To aid the responsibility of CFOs, we’ve summarized the issues above related to hidden costs of energy consumption down to these points:
Neglected appliances and equipment, unnecessary and frequent machine repairs and replacements, and a lack of a solid energy management system can all add up to increased operating expenses.
Because of these runaway expenses, your business’s profitability will be negatively impacted—introducing cash flow issues and reducing the business’ financial flexibility.
Eroded profit margins can be a small leak on the ship’s hull. While it can go unnoticed, it can slowly but surely sink a whole business when left unchecked. Aside from reduced profitability and cash flow issues, eroded profit margins can decrease a business’s competitiveness and hamper growth.
The worst-case scenario could even involve the potential for insolvency, where severe profit erosion can lead to a business’s bankruptcy or forced restructuring.
Lack of energy-efficient systems will lead to future compliance issues. These issues can involve the following:
Fortunately, solutions are available to you that can help you address these problems, control these hidden costs, and ultimately reduce them. Here are a couple of action items you can implement:
Our recommendation? Look for Energy Star-certified equipment. These appliances and equipment are designed to use less energy without compromising performance, ensuring both energy cost efficiency and product quality.
Regular maintenance ensures equipment runs efficiently and minimizes energy waste. These maintenance routines should also minimize the risk of costly equipment breakdown and prevent the need for expensive replacements.
Utilize smart meters or energy monitoring tools to track energy use and identify areas for improvement. Only once you can measure your energy use can you optimize your business’s energy consumption.
Remote temperature and humidity monitoring tools are convenient for monitoring your business’s appliances, especially cold storage units. Pro Tip: Go for monitoring tools that use Long Range Wide Area Network (LoRaWAN) connection for reliable 24/7 monitoring and data collection.
The action items are more of first-aid solutions to help you start addressing your business’s hidden energy costs. However, fully optimizing your business’s energy consumption would require a dedicated team that understands the ins and outs of energy optimization.
Consult with energy auditors or efficiency experts to identify and implement cost-effective energy-saving solutions. GlacierGrid, for instance, offers user-friendly and reliable tech solutions that your business can install for energy monitoring and optimization.
At GlacierGrid, we strive to help businesses improve their bottom line by providing energy efficiency solutions to reduce their overall energy costs. Even something as simple as installing a remote temperature and humidity monitoring system can protect your business’s assets—specifically its equipment and perishable inventory.
Feel free to book a demo with our team if you're interested.