How businesses reduced energy costs and helped the planet

In this piece in association with the Federation of Small Businesses, we look at how installing energy efficient measures or making simple adjustments can help SMEs reduce their energy bills.

Addressing how much your company spends on energy can make all the difference in a world of competitive business and razor-thin margins. It can be worth it to assess your cost base and identify where you can make savings as even adjustments that may seem small can have a serious influence on lowering your overheads in the long term.

Faith in Nature, a manufacturer of natural beauty products, has recently driven efficiency savings of more than £25,000 following a £40,000 investment.

As an eco-conscious manufacturer of shampoos, conditioners and a range of body and skin care products, those at the company were keen to ensure that they reduced their environmental impact, while at the same time reducing their energy usage.

Faith in Nature worked with the Business Growth Hub to ensure that its manufacturing processes are as efficient as possible. Over the last 12 months the company has taken a range of measures to reduce its use of energy, water, materials and become more efficient.

With the support of Business Growth Hub’s Green Growth team in Manchester, Faith in Nature undertook a resource efficiency audit and implemented a number of environmental improvements on-site. One of the biggest measures the company has taken has been to replace energy-intensive electric heaters with a 100kW biomass boiler to heat water used in shampoo production. The cost of this investment was £25,000.

Lighting has been improved across Faith in Nature’s site, with older fluorescent tube and metal halide lamps being replaced with energy efficient LED alternatives.

Other improvements include upgrading the company’s compressor, reusing the water that goes through chiller equipment multiple times to reduce water consumption and putting processes in place to cut residue losses from products stored in bulk containers.

Environmental champion Aaron Rose, vice chair at Faith in Nature says, ‘By continually investing in resource efficiency and putting new processes in place we are ensuring that we are not only keeping our environmental footprint to a minimum, which is central to our whole ethos, but also keep costs down in the long term as we continue to grow.’

Going paperless

The simple act of going paperless can do your bit for the environment. Suzanne Valance of Smarter Digital Marketing noticed the company was spending a fortune on printing paper when creating proposals and monthly reports for clients, which were often 8-10 pages long.

‘The amount of paper wasted was embarrassing, especially for a company which prides itself on all things digital. We would print a copy for us, and one for our client; looking back this seems ridiculous and an unnecessary waste for a small company!’

Research was done by the company, and it was found out that almost half of all paper is thrown out after 24 hours of printing.

‘We launched our ‘digital only’ reports a few months ago and now work almost entirely paperlessly. We spoke with our clients who agreed they would be happy to go paperless and actually preferred communication via PDF emails, it meant less paperwork for everyone,’ Valance says.

This could reduce not only costs but the company’s environmental impact. ‘In all honesty reducing cost was important to us though the environmental impact was appealing.

‘It was especially important for one of our clients, an energy efficiency company, which promotes sustainability throughout Scotland; we felt like hypocrites posting pages upon pages of paper to them each month.’

A big advantage of the system is that digital documents are all stored on Skype/Dropbox/GoogleDrive and can be accessed in an instant, much easier than searching through filing cabinets. ‘This was great when we moved premises last month as there was no clutter to drag through the city up three flights of stairs!’

Reducing energy in manufacturing processes

Dan Renwick, product researcher at Brushtec, identified rising costs and lower sales during the economic downturn resulting in smaller profit margins, and scrutinised the cost base in search of savings. ‘Being in manufacturing energy use is high, and something we keep a close eye on, so it was a natural area to save and improve on,’ Renwick says. ‘We knew that savings could not be made with machine energy cost, but identified that with our substantial amount of industrial lighting a change could be made to more energy efficient, and cost-effective lighting. Not only would this solution cut costs, but increase efficiency, making it a natural option to pursue.’

Each bulb costs £100, and the company has more than 50 between both factories, so the initial cost of replacement was more than fivefold that of the previous halogen lights.

‘This meant it took around half a year before savings were made on that initial cost, but since then we have reduced out CO2 emissions by 9,900kg per month, and saved thousands of pounds’ year on year,’ Renwick adds.

Sometimes it’s worth negotiating with energy suppliers for the best deal. Michael Wilkinson, managing director of app developer Planetwide City recently moved into refurbished offices and the last thing on his mind was his electricity supplier, until the supplier sent him a contract renewal document.

‘Not only was the information hard to follow, but, as a web application developer, this kind of thing is a bit alien to me,’ he says. ‘In addition, energy supplies did not interest me greatly, until I realised that I had been on a non-contract full-price rate. That got my attention.’

Wilkinson wondered how he was going to get through the maze of jargon and numbers, but attended a networking meeting and met with an energy consultant, after which he negotiated a fixed 24 month rate on behalf of his business. ‘This has allowed me to focus on my business: building great apps and websites, instead of worrying about energy bills,’ he says.

For those small business owners looking for better deals on energy, the FSB Energy Service can help you find and secure better rates for your business electricity and gas, ensuring you stay on lower, fairer rates for longer.

Further information on energy saving

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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