A retail budget analysis will reveal the cost of your current operations and will show that your energy expenditure, particularly your lighting system, represents a significant portion of your expenses. The best way to reduce your operating costs is by replacing your outdated lighting system with new, state-of-the-art fixtures and lamps, and the investment in your new lighting system will soon be recouped by your savings. It’s a win-win situation.
Use a Budget Checklist to Analyze Your Expenditures
You may need some guidance on how to properly analyze your budget, but you don’t need a detailed, overcomplicated audit, and you can ignore the merchandise cost and sales aspect. You simply need to see where the money to run your business is being spent and where you can save. The outcome for retailers is predictable, but you should satisfy yourself that more than a third of your monthly operating cost is for electricity, primarily lighting.
You may have access to a summary of expenses from your accountant but, if not, this checklist will help you make your own analysis. Review your monthly operational costs (or annual costs, if easier) for:
- Rent (or taxes, if you own the building)
- Electricity: heating, cooling, refrigeration and lighting, indoors and out
- Water and sewage
- Communications and advertising
Although some of these costs are fixed (rent, taxes, water and sewage, refrigeration for grocery stores and pharmacies), other costs vary, such as for heating and air conditioning, depending on the season; and lighting, depending on days and hours of operation and special occasions (example, Christmas); and communications and advertising costs, also usually seasonal.
Look at your highest variable operating costs and consider ways to make savings—you will find it is in your expenditure for electricity.
A Reduction in Energy Use is where Effective Savings can be Made
You can curb energy costs by:
- Managing and restricting electricity use where possible – turn off, turn down, and maintain by using a combination of programmable central controls plus timers, and motion and light sensors
- Replacing furnace and air conditioning filters regularly
- Adjusting the temperature of the store by minimizing heating and cooling in low traffic areas and when the building is not in use
- Having a maintenance contract for heating, air conditioning, and lighting
- Keeping lamps and fixtures clean
However, nothing you can do will be as effective as updating your high-energy-use lighting with new fixtures and low voltage lamps. Replace incandescent lamps with compact fluorescent lighting (CFL) and light emitting diode (LED) lamps to realize amazing savings in the amount of electricity consumed and further savings in the increased lifespan of these low voltage lamps.
You Will Recoup the Cost of Financing an Upgraded Lighting System
Although the initial cost of replacing your lighting system may be intimidating at first, there is money in your budget for operating the current system and so you can begin by factoring in:
- The money budgeted for replacement lamps
- The money budgeted for the cost of physically replacing burnt-out lamps
- The money budgeted to replace or repair damaged and worn out fixtures
As well, there are grants and discounts available from government and utility companies prepared to help with the expense of switching to environmentally responsible, energy-efficient lighting.
The major financing factor is the amount of money by which you reduce your monthly operating expenses. This savings will not only return your original outlay but will also positively impact your bottom line for years to come.
A retail budget analysis will help you identify your energy use and lighting system costs as major expenditures so that you can choose options that will reduce these costs. Call us now and we will help you find lighting solutions with spectacularly low operating costs. For more information, contact Lighting Solutions Worldwide: website: www.retaillightinganddesign.com; phone: 866-203-0434; email: firstname.lastname@example.org.