Energy Saving Tips From a Pro

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While many big companies are tapping into the small-business market, sometimes it makes more sense for the underdogs to stick together. That's the idea behind five-year-old Liberty Power, cofounded by David Hernandez after he left Enron in the wake of its collapse. At the energy giant, Hernandez got a front-row seat to see how large companies ignore little ones. Problems like lost invoices and bad customer service abounded, he says, as Enron paid more attention to large clients.

So CEO Hernandez decided his energy company would help small businesses pinch pennies in states with deregulated energy markets. Small-business owners often resign themselves to high energy costs because just running a business overwhelms them, he says. About a quarter of small-business owners say energy costs rank among their highest expenses, but fewer than half actually do anything to stem the flow of cash, according to the National Federation of Independent Business. "They are executing day in and day out, sitting behind a cash register, or dealing with payroll," says Hernandez. That leaves entrepreneurs little time to shop around for energy savings.

Like many small-business owners, Hernandez started out borrowing money from friends and family and maxing out credit cards. Liberty, based in Fort Lauderdale, Fla., first approached companies in New York, which deregulated markets in 1999, and then went to Texas and a handful of mid-Atlantic states. Liberty targets businesses that use a lot of power, such as restaurants, grocery stores, laundromats, and salons. With its low overhead, he says, Liberty can offer them lower rates and the chance to lock in a price for years. That kind of certainty is important to smaller companies that have to "watch every dime," says Hernandez. "If you are a small business projecting sales for next year, you are not contemplating a 50 percent increase in your electricity bill, but in some cases that's what small businesses have seen."

The company has been profitable for about three years, and last year revenues hit $100 million, about 90 percent of that from smaller companies. Liberty's average client has from 15 to 20 employees. The energy provider plans to move into about half a dozen additional states next year. As a small company itself with only 60 full-time employees, Hernandez says, Liberty is well positioned to cash in on states' opening up their energy markets to competition and the opportunity that offers small businesses. "We are a small business so we understand them better than the other guys out there," he says.

Here are Liberty's tips for how small businesses can lower their energy bills. While these changes may seem small, the company says, the savings can add up.

Turn off overhead and unnecessary lighting after hours. While lighting may be needed for security purposes, select energy-efficient light bulbs for all lighting, especially lighting used 24 hours a day.

Remind employees to shut down computers when they leave each night and turn off computer monitors.

Unplug any appliances that are not used on a regular basis. While the fax machine may always need to be plugged in, appliances like the shredder or electric stapler can be kept unplugged when not in use.

Keep office temperatures between 65 and 67 degrees during business hours. Set the thermostat to lower the temperature at night when the business is closed.

Work with your property manager to ensure windows are well sealed. Weatherstripping is an inexpensive way to reduce energy costs.

Contact your power provider to see if the business can lock in a fixed rate for energy costs.

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electricity

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