When it comes to planning for your business you need to think of every aspect not just the business action type of plans. Whether you're just starting up, have been going awhile or have recently moved into a new office, it's important to factor in the cost of your overheads.
How do you manage your overheads and have you factored the costs/ how to reduce the costs into your plans?
Darren Williams from Quikswitch knows all about cost saving plans and has been sharing his knowledge with us.
If you are going to take reducing your overheads seriously, you really need to plan a logical approach. For ease we are going to focus on gas and electricity contracts, however the same principals can be applied to merchant services, telecoms and nearly every other cost a business spends its money on.
It is easy to obtain quotes for your electricity and gas contracts from individual companies. Their respective websites will ask you to fill in a form with your company’s details and they will generate quotes for you. The drawback here is that you then need to visit other suppliers’ website and plug in the same information to get a comparison, repeating the process for further suppliers. Typically, customers will visit 3 or 4 of the ‘Top 6’ providers and compare the contracts on offer.
The quotes can be complicated and contain a number of variables that need to be considered before you are able to compare apples with apples. These variables include length of term, differing day/night rates, fixed or variable rates and sometimes hidden feed-in-tariff costs. However, without visiting some of the lesser known suppliers you might be missing out on the cheapest rates available to your company. These lesser known suppliers are keen to win business at the moment and therefore usually offer the most attractive rates. There are approximately 35 companies that fall into this category, that is a lot of ‘keystrokes’ to generate a whole-of-market comparison, but clearly not unachievable.
So now we have achieved a contract with lowest unit price on offer; that’s it right? It could be, however, there is a lot more you can do to reduce costs. The next step is to reduce the amount of units being used in the first place. Again, sticking with energy as an example, how can you reduce the number of kilowatt hours your company consume. Generally, there are four approaches to be adopted.
No Cost
This usually involves behavioural/cultural changes within a business. Ensuring lights are switched off when leaving a room is a really simple example of this.
Low Cost
This covers simple measures that represent low capital expenditure with quick return on investment, high efficiency lighting, for example.
Capital Investment
Schemes which require capital expenditure, but yield a return on investment by driving down your consumption and lowering energy bills. They can also improve your energy security, ensuring your site avoids outages. We are doing a lot of work on battery storage and solar panel arrays.
Corporate Aspirations
Some firms are really looking to take their approach to zero carbon seriously and these schemes do not tend to be linked to reducing a site consumption generally, but the entire organisations carbon footprint. Electric vehicle charging networks are the best example of this at work.
Finally, the last thing to look for is integration. How does one supply and usage interact with a different cost channel? Taking the approach that all of these costs form a complex eco-system is really beneficial. It helps you to bear down on every cost in your business. Every penny saved with no capital expenditure is a penny straight on to your bottom line. We often see businesses that are trading to full capacity but still want more profit. The above approach yields a significant reduction in overheads which positively effects the P&L and can be viewed as ‘free profit’.
QuikSwitch offer their clients an out-sourced procurement department, not only taking care of your energy overheads, as in the example, but every cost in a business with the same attention to detail outlined above. The service is free-to-use and comes with no obligation.
If you want to find out more about cost saving plans and how this will help your business speak to Darren from Quikswitch and he will be able to help you and your business.