13 ways to painlessly improve profitability in 2013: Energy as a profit center
By Jay Fiske

As the economy appears to be gaining steam, are you prepared to reap the full benefit? There are still plenty of economic challenges that require both business acumen and financial agility. Whether it’s merchandise, labor or overhead costs, convenience store operators must keep all of the plates in the air and spinning if they are to maximize profits and head off a potential business crash before it literally brings down the house.

While operators are conditioned to keep a tight rein on merchandise and labor costs, when it comes to overhead, many throw up their hands in frustration and resignation. You may not be able to change the terms of your lease or rising property taxes, but energy — along with merchandise and labor — are “the big three.” And you can tame your energy costs just like you do the other two.

According to EPA ENERGY STAR® the typical convenience store uses about 52.5 kilowatt hours (kWh) per square foot per year. Not surprisingly, refrigeration accounts for the largest slice of that pie at 38 percent followed closely by heating, ventilation, and air conditioning (HVAC) coming in at 28 percent and another 23 percent that goes to lighting.

As an operator, you can almost hear the combination of those three gobbling energy faster than a teen gulps down a Slurpee on a hot summer’s day; it’s eclipsed only by the sucking sound as the dollars fly out of your till. If you reduce your usage by even 20 percent, what would that do to your bottom line? Now, that’s a profit center!

We hope you’ll join us as we bring you 13 installments that provide a step-by-step roadmap to help you become master of your energy fate. It begins by looking at energy in a completely different way.

COMMUNITY PULSE

What is the biggest energy expense in your facility?
  • 1. Refrigeration
  • 2. HVAC
  • 3. Lighting
  • 2. Other
1. Energy as a profit center

Yes, it does turn the P&L on its head, but energy can make the difference between profit and loss, meager survival and thriving business. Unlike merchandise and labor costs, energy is much more nebulous. It is the only widely purchased commodity that is bought without knowing how much it costs until after it has been used. When the bill lands on your desk with an ominous thud, you’re left to wonder where it all went. And because energy bills reflect only the total therms and kilowatt hours, they don’t provide information in a way that allows you to take proactive action.

Reining in energy costs doesn’t have to be rocket science. All it takes is “energy-smart” mindset, making some simple changes, and a way to measure your progress. This series of articles will show you how to get started by benchmarking usage, identifying your hiding energy hogs, making some simple operational changes, and bringing your employees into the game as the front-line soldiers. For more information about reducing your energy bill, visit Powerhouse Dynamics.

To get you started, here are three quick energy-saving tips from the folks at EPA ENERGY STAR®:
  1. Clean refrigeration condenser coils. You’ll be shocked at what you find back there. Manufacturers cite it as the No. 1 reason for service calls. Keeping the coils clean also extends the life of the equipment.
  2. Check temperature settings on refrigeration units. If settings are lower than necessary, chances are you are wasting energy. The most common recommended settings are between minus-14 degrees and minus-8 degrees Fahrenheit for freezers and between 35 degrees and 38 degrees Fahrenheit for refrigerators.
  3. Replace incandescent bulbs. ENERGY STAR-qualified compact fluorescent lamps (CFLs) use two-thirds less energy and last up to 10 times longer than standard incandescent. You’ll recover the cost of the change in about four months and after that, the savings flow straight to the bottom line.
This is just the beginning of our energy-saving journey. We promise it won’t be expensive, difficult or painful. It’s a series of “baby-steps,” if you will, but they all add up to “grown-up” profits.

Jay Fiske is vice president of business development for Powerhouse Dynamics, developers of the eMonitor energy, asset and water management platform for homes and small commercial facilities. Fiske is responsible for leading the company’s overall sales and marketing strategy, developing and growing market channels, and establishing strategic partnerships.