The ENTOUCH Blog

09. 29. 2015

Energy Management: A Overlooked Competitive Advantage

Blog9292015The restaurant business is tough! It is commonly quoted that 90% of restaurant businesses fail within the first year. Or do they? A Cornell University study puts the number closer to 60%[1]. Pretty good compared to the average 85% failure rate of new businesses in the United States. The restaurant industry has a reputation as a hard start. Overcoming the typical obstacles is tough but possible. Can energy management play a part?



Multi-site Restaurateur’s Face Tough Challenges



Several factors make the restaurant business challenging - rising food costs, capital constraints and competition. Profit is important and cash flow is king!



The intrepid multi-site restaurateur has to find creative ways to maximize cash flow and profitability. These are key to overall success. When evaluating options, energy may not be high on the priority list. A National Grid study estimated 3 to 5% of restaurant operating costs are spent on energy[2]. However, energy management can provide the multi-site restaurateur with a tremendous return on investment.



Energy Management Can Make a Difference



Do not overlook the power of effective energy management. It is easily done. The average person’s energy knowledge amounts to turning on a light switch. The food service industry knows better. According the U.S. Energy Information Administration (EIA), the restaurant industry has the highest energy intensity per square foot of any other industry[3]. Efforts to control those energy costs go immediately to increasing cash flow and improving the bottom-line profitability. The EIA estimated that saving 20% on energy operating costs could improve a restaurant's profits by as much as one-third[4]!



Energy prices will continually rise. The Edison Electric Institute reports energy costs, since 2000, are increasing an average of 2.5% annually[5]. That includes market volatility and rising delivery costs from your local utility. What is the most cost effective way one can lower energy bills? Use less energy.



Energy efficiency is the lowest cost option to controlling your energy bill today and in the future. Lawrence Berkley National Laboratory recently released a study showing that the average cost of energy efficiency for commercial business is $0.055/kWh[6]. Seems reasonable. But consider that the EIA reports that the average retail rate for the same sector nationally is $0.1075[7]/kWh! This puts $0.0525/kWh of cash back in the pockets of business. Saving energy and smartly managing what you use increases returns.



Energy Management Made Easy



That sounds great, but how does a multi-site restaurant facility team implement an energy management solution when they have limited time and budget to implement? Not to mention that traditional energy management solutions have been limited to large industrial players in the past and not really designed for multi-site restaurants.



Thanks to wireless technology, the use of big data and the Internet or “cloud,” there is now a cost-effective, simple, turnkey energy management solution for multi-site restaurants that leverages energy intelligence software (EIS) to accurately assess and control energy consumption and expenditure.  A business intelligence platform that provides a dedicated team of energy experts who utilize leading-edge software, best-in-class hardware and real-time analytics to improve operational efficiencies, significantly reduce energy consumption and maximize energy savings.



Energy management is an accessible way for multi-site restauranteurs to use less energy. Know more about your operations, reduce cost, and improve cash flow along with the bottom line.



Give EnTouch a call today.



Photo Credit: https://en.wikipedia.org/wiki/Revolving_door#/media/File:Revolving_Door_Sign.jpg

 

 

[1] Cornell University 304-322 46.Number 3 (2005): 304-22. Pitch Forks Optional. Cornell University. Web. 16 Sept. 2015.

http://pitchforksoptional.com/wp-content/uploads/2011/12/restaurantsfail.pdf

[2] ESource Customer Direct (2002): 1-4. www.nationlgridus.com. E Source Companies LLC. Web. 16 Sept. 2015.

http://www.nationalgridus.com/non_html/shared_energyeff_restaurants.pdf

[3] CBECS Trends. Energy Information Administration, 1 Dec. 2004. Web. 16 Sept. 2015.

http://www.eia.gov/emeu/efficiency/cbecstrends/cbi_pdf/cbecs_trends_5b.pdf

[4] http://www.energystar.gov/buildings/facility-owners-and-managers/small-biz/restaurants

[5] Www.eei.org. Edison Electric Institute. Web. 16 Sept. 2015.

http://www.eei.org/whatwedo/PublicPolicyAdvocacy/StateRegulation/Documents/rising_electricity_costs.pdf

[6] The Total Cost of Saving Electricity through Utility Customer-Funded Energy Efficiency Programs: (2015): 1-22. Emp.lbl.gov. Lawrence Berkley Laboratory, 1 Apr. 2015. Web. 16 Sept. 2015.

https://emp.lbl.gov/sites/all/files/total-cost-of-saved-energy.pdf

[7] EIA. EIA, 26 Aug. 2015. Web. 16 Sept. 2015.

http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_03

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