How Does Your Small Business Cut Energy Costs?

Small businesses have endless expenses, but one of the largest is the cost of energy.  Almost every small business must use energy in one way or another.  For small, local companies that are competing with larger conglomerates, fluctuating energy costs can be quite a hindrance, to plan for and to pay for.  Businesses are continuously looking for ways to cut back on the cost of energy.  Particularly in the wake of rising energy costs such as gas prices, most small businesses are forced to find new ways to ensure they are not losing too much money.  

Small companies that rely heavily on transportation and delivery can save money on energy costs by doing some simple planning ahead.  For trips that require numerous stops, companies should map out the most effective route that encompasses all needed destinations.  Some businesses tack on fuel surcharges when making deliveries at times when energy costs increase and then remove them when they decrease.  This trend began in 2008 when gas prices sky-rocketed.  

In the age of online communication, most meetings can be done via Skype, Google Chat, or in conference call.  Instead of using the money to pay for fuel to drive to meetings, small businesses are choosing to communicate via the internet, setting up meetings online or over the phone. Some businesses have chosen to eliminate their land line and do all of their telephone communication either by cell phone or VoIP.

Another crucial way to save money when energy costs fluctuate is maintaining your business vehicles.  Make sure, particularly after harsh winters, that engines are finely tuned, oil has been changed, and tire pressure is where it should be.  All of these can positively influence your car’s gas mileage.  When gas prices rise, the costs of shipped goods also increases. Small businesses especially must find ways to combat the expense of energy, so some choose to increase the price of their product or service.  Even a small increase can help balance the books.  

Gas prices fluctuate for several reasons.  Generally, the change in season from winter to spring brings more drivers out, which causes prices to rise.  The trend is that prices decrease after the initial spike in beginning of the summer, but after Memorial day will increase again with the amount of travelers on the roads.  Prices also follow the fluctuation of global oil costs; rising and falling when they do.  Another reason prices may rise is seasonal maintenance and upkeep of refineries.  

Small businesses have obvious budget adjustments to make when it comes to fluctuating energy costs.  There are some obvious ways companies cut energy costs such as regular vehicle maintenance.  But also underlying ways that may not be as apparent to the consumer eye but are in direct correlation to the increase in gas
prices, such as product cost inflation.  However small businesses choose to adjust; energy costs have a large impact on net income and in turn, on our local economy.

Small Businesses and Rising Gas Prices

Rising gas prices can be stifling for all of us, but the effects for small businesses can be much worse.  Numerous factors play into the negative outcome that spikes in gas prices can bring to small businesses.  Companies that rely on local transportation and delivery as a large part of their profit can be hit very hard.  

David Parsons, president and CEO of AAA Carolinas stated, “Spring is a difficult time for drivers, when gas prices typically rise due to refinery maintenance.  The tightened supply throughout the country results in higher gas prices.”  An increase in prices can also be correlated to the higher demand of drivers after the brutal winter most of the country experienced this year.  Seasonal maintenance at refineries is an additional factor for increasing gas prices.  

Small businesses that are already competing with large conglomerates have a more difficult time coping with the spike in gas prices that can come seasonally.  Delivery costs for businesses that base much of their profit on the transportation of their product suffer exponentially when gas prices increase.  They look for other ways to cut costs which can come as cutbacks, shorter business hours, even moving manufacturing out of the United States to countries such as Asia.  For some small businesses, an increase in gas prices may mean an increase in the cost of their product to make up the difference.  

Fuel usage is a major expense for small, local companies.  Especially businesses that focus on packing and delivery as the main source of their profits can be highly affected by soaring gas prices.  The arrival of spring can mean greater business and easier travel for small companies, particularly after this year's horrendous winter weather.  Increased gas prices work against this potential of growth for small companies.  

The trend that gas prices generally follow is to rise in the spring, come back down around Memorial Day, and then increase again through the summer. Businesses must find ways to work around the spikes and sustained rises.  By cutting costs, carpooling, organizing deliveries accordingly, and preparing ahead of time, local companies can generate as much profit as possible during the high-cost period.  Although they adjust, small businesses are one of the sectors of the economy most affected by gas spikes. And since much of business consists of small businesses, this problem affects all of us.

Does your business need a lawyer?

Every business owner is loath to spend income on unnecessary expenses, particularly smaller, newer or home-based businesses on thin margins who have yet to make much profit. It's much more satisfying to pay someone to make you an impressive website or even keep your books. However, the United States currently has a very litigious climate; as a country we spend about 2.2 percent of the gross domestic product, approximately $1000 for each person on tort litigation. In these circumstances finding a good lawyer is like hiring a bodyguard - with his presence and expertise, he'll stop attacks from happening as well as deal with any that do actually occur.

There are a number of areas a small business owner will need to consult a lawyer about: contracts, taxes and licensing, and real estate matters such as purchasing or leasing property or equipment. Over time matters that should be rather simple have become increasingly more complex because of other lawsuits. The legalese on these documents gets denser as sued parties attempt to reassert control. If the average person doesn't understand a basic user contract for an internet site like Facebook, how is he expected to know what's been inserted into his rental contract as a disincentive for his company ever to sever the relationship? No one wants to sign a lease from the Hotel California, after all.

At the outset of your business, you should consult an attorney about the legal basics of business formation. A number of things can be done without a lawyer's involvement. You don't need a lawyer to name your business, claim a trademark, hire employees, create buy-sell agreements, or file initial paperwork, but the Small Business Administration recommends consulting a lawyer to:

• Form a corporation
• File a patent
• Buy or sell a business
• Handle litigation

Particularly when dealing with litigation, it's advisable to have an attorney who is already familiar with your business and, preferably, has the kind of clout necessary to intimidate instigators of frivolous lawsuits or ambulance chasing. If you have not yet consulted an attorney to represent your business at least in times of legal necessity, start asking around for recommendations now - because when you need one, you really need one.

Is it time for your business to ditch the landline?

CDC data from the 2013 National Health Interview Survey show that nearly 40% of American homes now use only cell phones for telephone communication. An additional 15.7% of the population had landlines, but still received all or almost all their calls on wireless telephones. Poor Americans reported higher rates of complete dependence on wireless phones - 55 percent of adults below the poverty level had only wireless phones at home. Having a landline and a cell phone is a double expense, after all, and when money is tight can't always be justified.

Many small businesses are run from home and have limited budgets. Small business owners may feel there is no good reason to add a landline number and pay another bill. But having a landline has its advantages, including:

• Clarity of sound - background noise is far more minimal on a traditional landline and voice quality is better than on cell phones or VoIP. 
• Accessibility - landlines do not need a clear wireless signal or an internet connection to operate.
• Sturdiness - by virtue of being less portable, landline telephones last longer and get lost less often. Their batteries also last longer. Those old phones your grandparents had in the 1970s still probably work. Does the cellphone you dropped in the toilet or left in your unlocked car?
• Features - many of the features businesses have come to expect from telephone systems are only available on pricier wireless systems.

There are, of course, advantages to VoIP (Voice over Internet Protocol) and cell phones including significant cost reduction, portability, and the ability to route multiple numbers to one phone - a clear advantage to a businessman on the go. 

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Still it's clear that communication technology is changing rapidly and will continue to change. At some point, even those who are entirely satisfied with the old way of calling will be forced to update their systems because telecommunications companies will find it prohibitively expensive to offer options that satisfy every user, from techie to Luddite. So small businesses should keep the shift in technology in mind for tomorrow, even they hold on to their landlines today.

Questions to ask a computer consultant before you hire him

Today's office run on information, and for many businesses, a significant amount of this information is vital and confidential. Therefore, it's vital that you hire a competent, responsive, trustworthy computer consultant, and you should do your homework on your options before you experience a major system crash or potential data loss.

Despite the challenges constantly changing technology poses to the casual computer user, computers are much more user friendly and versatile than they used to be with a plethora of different built-in programs to help recover data, restore programs, quarantine viruses and address a host of other problems that used to be much harder for the average person to deal with. More intrepid users have never had lower or cheaponer technology hurdles as open source software is free and continuously being expanded. Still the average business owner is knowledgeable about his business, not necessarily about computers or technology. And as he would want to find someone trustworthy to work on his car, as his life literally depends on the work done, he needs to find a quality computer "mechanic" for his company's needs as well. Customers who have

Vetting computer consultants is, in many ways, like vetting other employees; you need to determine if they are dependable, trustworthy, responsive, responsible, and comprehensive. Here are the things you must determine:

Responsiveness: You should ask if the consultant has a live operator, or if there are only scheduled hours for customer service. How soon will they respond to telephone or email inquiries? How soon during a data or systems emergency? Do they take the time to explain to their clients what is wrong with their computers or systems and how this might be avoided in the future? Will they give details as to what the problem is, in everyday English that people who are not technical will be able to understand? Is their customer service based locally or is it outsourced to another country?

Diligence: Will the consultant be proactive with your system, avoiding problems before they crop up, maintaining and updating hardware, software, virus definitions, and backups, regularly checking them all to make sure everything is functioning and there are multiple copies of important data? Is the consultant's organization large enough that it can function just as smoothly when someone goes on vacation or gets sick?

Liability protection: Is this consultant's company fully insured so that if, in the unlikely event mistakes happen, your business is protected from financial harm and could be compensated for lost time and productivity?

Trustworthiness: How does this consultant's company vet their own employees? Do they do full background checks? Are they required to remain current on their certifications? Have they had any previous incident with breaches of data?

Comprehensiveness: The consultant will take responsibility for the functionality of which systems, networks, or machines, specifically? Which will remain your responsibility?

Obviously, you should never hire based on brand recognition or price alone. Plenty of people think they know computers and can fix whatever you need for cheap. How much your data worth to you? How much is your data's security worth to you? The neighbor's kid may know computers; if so, hire him for smaller projects, not your overall system security. But big names are no guarantee of good service - ask the woman who sued Geek Squad for leaking her nude pictures online. Or the owner of the missing laptop Geek Squad tried to cover up.

Millenials and Entrepreneurship

Here is Alexis Ohanian, co-founder of Reddit, being interviewed about Millennials, opportunities for start ups, and the sudden burgeoning of entrepreneurship among young people.  This blog has covered before the situation young people are in coping with the present bad economy. Ohanian point, that the lack of economic opportunities means that there's no opportunity cost for entrepreneurship, and that this is the silver lining in our economic cloud is an interesting one. He also points out that the barriers for entry into business have never been lower because of increased access to consumers and open source software.

Michigan Future, Inc. put out a report several years ago with the purpose of attracting knowledge workers to Detroit and thereby encouraging the revitalization of downtown Detroit. Their "knowledge workers" are Ohanian's audience as well - young, very bright, creative, willing to work hard and take risks. In the past they've gone where the jobs are and taken their energy and drive with them, reducing the fortunes of smaller cities already on a downward spiral and enriching larger cities with, arguably, enough knowledge capital. Now, however, with good jobs hard to find nationally, they have incentive to stay where they are and build their own opportunities.

The less fortunate part of this is that knowledge workers - people who can create with "a laptop and an internet connection" are only a small subset of the general population. Most would be small business entrepreneurs still need some capital to get started. Even if you have the knowledge to build a parts washer to spotlessly clean engine liners, you can't do it without investment capital. While some small businesses can be run from home, manufacturing plants, auto garages, medical care centers, and organic farms, to name but a few, cannot, and those are the businesses who will hire workers who are not knowledge workers but still need employment. The economy won't get better until there are jobs available to the average worker, not just the specialty one.

It is, however, a blessing for very bright people who don't want to move away from their communities to find their livelihoods. And, eventually, many knowledge workers do generate jobs from their risk taking. Reddit only has 28 employees, but Ohanian has other projects that fund average people looking for a break.  It's not an overall solution to the nation's economic problems, but for those people he's helped get exposure and funds it's been life changing. We need to see more of this virtuous cycle of economic activity.

Business cards - Are they worth it?

You seem them everywhere, in every business, in fishbowls in restaurants - you probably have more than a handful stuffed in a drawer somewhere in your house. But do you ever look at them? Business cards: are they just an unnecessary expense?

We asked John Potter of Grand Rapids Area Professionals for Excellence (GRAPE), a business networking group in Grand Rapids, MI, and he said, "If you're using business cards as a marketing tool, then your expectations may not be met, but if you're using them as a contacting tool, then they can be useful. It's simpler and more professional for me to hand my business card to someone I've spent a half hour talking to at an event than writing my email or phone number on a stray piece of paper. I'm glad to have business cards for that purpose. Just don't spend a great deal of money on them, because they get forgotten and tossed aside much of the time."

Business cards now come in more a lot more than just the standard form (or media). Numerous options are now easily and cheaply available to make your card, and thus its representation of your brand, stand out. But should you go for standard, unique, or full-on special snowflake? Or is this just flashy or even alienating to your potential customers?

Consider the business that you are in. How likely is your clientele to care if you don't hire a professional to design your logo? If your business is marketing, it's important to make the investment. If your business is auto repair shop management, perhaps putting your marketing dollars elsewhere may do more good for your bottom line. If a funky card would put off or even shock the majority of your clientele, it's a liability, not an asset. You may live in an area with heavy competitive for funeral home services, in which case comprehensive branding might be necessary. But probably not.

It can be fun to design and redesign and order business cards, but even if yours are original and make people comment on them and remember them, evaluate how often and how successfully they convert into leads and sales. If the answer is "not very often," rethink this part of your branding and advertising budget.