Managing The Long-Term Fixed Costs Of Your Business

Every business has fixed costs, ones owners have to factor into the monthly operating budget. These include taxes, labour, insurance and energy costs. With economic times as tough as they are right now, every business — especially independents — is looking for ways to put a lid on those costs.

In this issue of SSGM, David Halpert and I look at various ways owners of independents can better control or reduce some of those fixed costs. Halpert takes a closer look at the issue of remediation and the new framework the Ontario government, OCETA and CPPI have developed for garage owners. This is an issue more owners have to deal with as many now are reaching retirement age and are looking to sell their businesses or are looking to move existing operations to new locations as leases come up for renewal. With stricter environmental laws, many owners discover if they wish to move, sell or alter their properties (such as removing underground fuel pumps and tanks) there are costs involved in reclaiming the land, costs the owner may have to take on themselves. As Halpert rightly points out, not everyone is going to be lucky in finding someone, say a condominium developer looking to build a luxury property, to take on the cost of reclaiming the land when you are trying to sell the business.

I have taken a closer look at energy audits. Most will know of energy audits offered to home owners, with the provinces of Ontario and British Columbia offering rebates to owners who take on the cost of such an audit, in addition to the ecoENERGY grants provided by the federal government. Lesser known is the availability of energy audits for small-and mid-sized businesses. There are numerous firms that can do the audits and it takes less than a day for the audit to be completed. The result is an actionable plan to help reduce energy costs and thereby overall business operating costs.

Like investments in new equipment and technologies to help the business run more smoothly and profitably, an energy audit is a similar investment in the long-term operation and profitability of the business. A good audit will pinpoint savings and make recommendations on investments in new equipment and technologies that in the long-run will reduce operating costs by reducing the amount of energy used by the business. It is the same with the issue of land remediation. With a proper environmental assessment, a business can budget accordingly for the cost of reclaiming the land if there comes a time to sell, move or to alter the site in any way. With times as tough as they are right now, managing such costs is critical. David and I sincerely hope that our stories can offer some guidance and ideas to help our readers remain successful.

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There are numerous firms

that can do the audits and it takes less than a day for the audit to be completed.

The result is an actionable plan

to help reduce energy costs and thereby

overall business operating costs.