Your work hard to make money. Wouldn’t it be nice to hold onto 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 which factors are driving these expenses and by how much. It’s likely that your business is spending too much on these resources. But it’s tough to pinpoint and control that excess when it’s invisible.
The good news is that technology is pulling back the veil on these hidden costs. Products are now 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.
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 the data, and help you more efficiently manage what’s being tracked. And it may be surprising, but many of these solutions are more affordable than you might think.
In Smart Business, a free new report available online, you can learn about a range of these IoT-enabled solutions associated with energy conservation, fuel efficiency and water conservation. In the report, each one is accompanied by a dashboard that makes it easy to visualize the initial investment, payback period, cost savings, and effort involved with installing solution. 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.
Since many small businesses operate on a thin margin, these savings can make a big difference. For instance, according to Sageworks—a leading source on industry data for privately held companies, 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. Consider the alternative though. Each of those retailers 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.