The hidden costs draining your business’ profits
These days margins are tight, and profitability relies on keeping costs in check. While most are familiar with managing visible expenses like staffing, operational costs, and logistics, there are costs that often go unnoticed. These hidden expenses can quietly drain profits, impacting a business’s financial health if left unaddressed.
Energy consumption
Energy is essential, powering everything from lighting and heating, to workstations, water coolers and printers. But what many businesses fail to realise is that energy consumption can be much more wasteful than they think. Inefficiencies can creep in without anyone noticing.
This waste isn’t always easy to spot. It builds up slowly, month by month, until the financial impact becomes too large to ignore. Many businesses may not even realise the savings they could achieve by optimising their energy supply or by upgrading to more efficient technology.
The cost of energy, while often considered a fixed operating expense, can be deceptive. Inefficiencies in energy use can add a hidden burden to the business, one that can spiral out of control if left unchecked. Reducing energy waste is crucial, but how do you start when the waste isn’t always visible?
Equipment downtime
Nobody wants equipment downtime. When your equipment stops working the business can grind to a halt, deadlines might be missed, and employees sit idle. It’s a costly situation that no business can afford. Making excuses and damaging customer relationships can be a major detriment to a business large or small. On top of that, repair or replacement costs can be hefty. If downtime happens frequently, it can chip away at profitability.
One often-overlooked cause of downtime is power quality issues. Unstable voltage can affect all sorts of equipment, causing malfunctions or shutdowns. When voltage fluctuates or spikes the resulting downtime adds to costs in terms of both lost production and maintenance.
Is your electricity consistent?
You would imagine that your business has a consistent supply of electricity, similar to when you turn on a tap, water comes out. But much like water the flow of electricity isn’t always at the same ‘pressure’ or voltage, at all times. This might result in added wear and tear but also could mean that your business is paying more for their electricity than necessary. Voltage surges, harmonic distortions, or fluctuations can cause equipment damage or lead to inefficiencies.
Running your business on inconsistent power doesn’t break equipment outright, but everything works harder than it should to compensate. This overwork leads to increased wear and tear, more frequent breakdowns, and even early failure. All of these factors add hidden costs that, over time, reduce profitability.
The unfortunate truth is that many businesses don’t notice these power quality issues until they result in costly disruptions.
The impact on profit margins
Although each of these hidden costs might seem minor individually, together they create a problem that can erode profit margins. Picture a manufacturer who has invested in high-quality machinery, optimised their workforce, and streamlined logistics. Despite these efforts, profits aren’t where they should be.
The reason could lie in these unseen costs. Inefficient energy use, frequent equipment downtime, and poor power quality might be quietly working against the business. While they’re not immediately obvious, the impact on profitability is noticeable and this translates across sectors.
Addressing these hidden costs
Identifying and addressing these hidden costs is essential for businesses who want to protect their margins and stay competitive. Fortunately, there are solutions that can help solve these inefficiencies. One approach is improving power quality and energy efficiency.
This is where voltage optimisation becomes relevant. Without diving into technicalities, voltage optimisation ensures that the electricity supplied to your machinery is stable and at the right level. This reduces the strain on equipment, lowers energy consumption, and improves efficiency across the board.
Although we will explore this further in upcoming articles, it’s worth considering how optimising voltage could be key to reducing these hidden costs. By improving power supply stability, businesses can prevent unnecessary energy waste, minimise equipment downtime, and protect their profits.
Get real insights into your energy use with Troo Volt.
Troo Volt is a simple, free tool that helps your business understand its voltage levels and discover potential energy savings through voltage optimisation.