The Food Service Industry Faces The HIGH Cost of Doing Nothing!

Unfortunately, the FACT is that electricity costs are NOT going down – EVER.

Why are electricity rates rising?

  • Inflation of all costs and devaluation of the dollar
  • Rising oil, gas, and coal costs
  • Rising utility operating costs (union wages and benefits, insurance)
  • Rising distribution costs (power line easements, copper cable costs)
  • Rising regulatory costs which have caused HUNDREDS of power plants to close while electricity demand continues to grow!

In addition, your electric bill has become a source of funding for politicians and government agencies. Like taxes on gas and your telephone, numerous surcharges and taxes have been added to your electric bill to fund:

  • “Green” alternative energy development subsidies
  • The unpaid bills of businesses and households
  • The repayment of expenses for storm damage repairs across the U.S.
  • Incentives for energy-efficiency

The last item above – incentives for energy-efficiency – is HUGE! Here in Arkansas, Entergy Arkansas has accumulated a fund of over $9 MILLION earmarked for energy-efficient projects 2013. This is money collected from customers – not Entergy’s profits!

On top of these factors must be added a future “Cap and Trade” system that will tax power generation and all levels of consumption of fossil fuels. Note: the intention of “Cap and Trade” is NOT to increase the supply of electricity but to increase the COST – and to generate revenue for completely unrelated government spending.

President Obama stated, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” “Skyrocket” has been defined as electricity and other energy prices at least doubling, and likely tripling!

The food service industry is particularly impacted by high energy costs. (Food service includes not only food processing, but grocery and convenience stores.)

Consider these statistics:

  • Refrigeration and lighting account for 50 to 65 percent of total energy use in the average super market? (Source: EnergyStar)
  • Food service is the most energy-intensive commercial market sector, with restaurants using up to three times more energy per square foot than most other types of commercial buildings? Typically at least 50 percent of this electricity consumption can be attributed to lighting and refrigeration. (Source: US Dept of Energy)
  • Refrigeration consumes large amounts of energy in cold storage warehouses – normally over 50 percent of the total utility bill. (Source: MG&E)

This dependency on refrigeration and susceptibility to energy costs also applies to other businesses and organizations including schools, florists, funeral homes, liquor stores, etc.

What can be done to combat rising electricity costs?

There really are only TWO choices:

  1. Businesses and facilities can identify ways to drastically reduce energy demands. Unfortunately, a viable business has limited options when it comes to turning off equipment and lights – especially busineses that are open 24-hours per day! The only possible alternative is to install more energy-efficient technologies.
  2. Or – the business can attempt to increase gross revenue at a rate faster than rising electricity costs. This would require increasing sales and/or raising prices.

Many businesses and organizations operate by wishful thinking. They have refused to confront these choices. They have preferred to operate in “blissful ignorance” that rising costs will not, in fact, put them out of business!

For businesses that think they can increase sales or revenue to stay ahead of electricity rate increases, look at this example:

Year 1 electricity costs: $10,000 per year, for example.

Year 2: after a nominal 5% rate increase on the SAME consumption – that is, assuming there is no increase in electric demand in any way – electricity costs will now be $10,500 per year.

Year 3: $11,025.00 after another 5% annual increase.

Year 4: $11,576.30.

Year 5: $12,155.10.

As you can see, electricity costs do not increase “linearly” or by a straight $500.00 per year. The 5% annual rate increases result in COMPOUNDED price increases of 122% over just five years. The 5% annual rate increases will also result in a COMPOUNDED price increase of 155% over ten years.

These increases do NOT include added surcharges, taxes, fees or the looming “Cap and Trade” penalties.

Now consider how much sales need to increase to offset a 5% increase in electricity costs: (For this example we will assume a “generous” profit margin of 20%.)

Year 1: the business will need to sell $50,000 of products or services just to pay for $10,000 in electricity costs if it has a 20% profit margin. This ratio also applies to budgetary revenue in the case of a non-profit organization or institution.

Year 2: to pay $10,500 the business will now need to sell $52,500 of products or services.

Year 3: to pay $11,025 the business will now need to sell $55,125.00.

Year 4: to pay $11,576.30 the business will now need to sell $57,881.50.

Year 5: to pay $12,155.10 the business will now need to sell $60,775.50.

The bottom line – that MOST businesses ignore – is that to be able to pay for a LOW 5% increase in electricity expenses over FIVE years, sales will need to increase by 152% just to break even! Anything less will result in lower net profits.

Likewise, a non-profit organization, government agency, school, etc. will need a 52% increase in their budget to offset these higher expenses!

The reality is that few – if any – businesses or institutions can plan on increasing sales or their budget by 50% in the next five years.

And that brings us back to the only other alternative: reducing energy demands.

Fortunately, there are MANY options. As mentioned previously, here in Arkansas, Entergy Electric has massive funding available to subsidize the cost of energy-efficiency projects. The scope of projects includes lighting, refrigeration, and HVAC upgrades.

For example, technologies now exist that reduce energy consumption by commercial refrigeration systems (walk-in coolers, freezers, and retail refrigeration) by as much as 80% without any changes to business operations!

Companies including FridgeWize have developed and install retrofits on commercial refrigeration systems that save businesses hundreds (and in many cases, THOUSANDS) of dollars per month in electricity expenses.

These huge energy savings produce cost savings that are actually are GREATER than the retrofit project costs!

Businesses recognize that every dollar in expense reductions AUTOMATICALLY increases NET profits by the same dollar. This ratio is NOT dependent on profit margin. Net Profit always equals Sales minus Expenses!

The FASTEST way to increase profits (or a budgetary surplus) is to reduce expenses! It is a 1 for 1 ratio, EVERY time.

So every $1,000 reduction in electricity costs by making upgrades to refrigeration systems with advanced, energy-efficient technologies automatically adds $1,000 in NET profits. This is ALWAYS true without any increase in gross sales volume.

On the other hand, as shown above, to add $1,000 in net profits would require a $5,000 increase in gross sales for any business with a 20% profit margin.

So what does it cost to retrofit commercial refrigeration systems with these energy-efficient solutions?

The REAL cost is NOTHING! No really: ZERO!

Remember, the energy savings are continual month after month, year after year. These expenses savings are cumulative and are GREATER than the cost of installations! In addition, many businesses finance the costs with low monthly payments that are LESS than the savings on their electric bills.

In either case, these businesses literally MAKE MONEY by reducing expenses by upgrading their refrigeration systems!

Now if a business or organization could make refrigeration upgrades and their electricity cost savings ONLY EQUALLED the price of the installations, their net cost would be ZERO. But when these facilities actually save MORE than the costs, they are literally being PAID to make energy-efficient upgrades!

If this wasn’t enough, utilities such as Entergy Electric here in Arkansas provide rebates for these installations. In the case of Entergy Arkansas, energy efficiency programs qualify for rebates of up to 75% of the project costs!

This is worth repeating: over and above the ongoing electricity costs savings provided by refrigeration upgrades – that we have already established provide 100% net profits – utilities such as Entergy Arkansas pay cash rebates.

How much can upgrades to refrigeration systems (such as those installed by FridgeWize) save YOUR facility?

How much will your local utility pay your business OVER AND ABOVE these costs savings?

The answers to these questions can only be answered by an evaluation of your refrigeration systems by an energy-efficiency consultant. Such audits may require a paid contract, however Entergy Arkansas and FridgeWize offer free on-site evaluations. These evaluations will provide the savings projections required to make an informed business decision.

Whatever the details of your refrigeration system, there are upgrades available that can provide costs savings – and profit increases – in as little as 30 days. And businesses need to remember that these energy-saving upgrades have a low, one-time cost and then provide compounded expense reductions month after month, year after year!

An Overview of the Daycare Service Industry

The daycare or ‘child care’ industry generally refers to the care of children by non-family members outside of the home. The industry is quite broad and includes small home-operated daycare centers right through to large pre-school centers that take on an educational role as well as caring for the physical needs of children.

Some daycare businesses focus on children of a certain age. Infant care centers look after babies and children younger than two and ‘before’ and ‘after’ school care centers cater mainly to older children up until their teenage years. The main sector of the market is children under six who have not started school yet.

Daycare is a multi-billion dollar industry in the US and it has shown phenomenal growth over the past three decades, spurred on by the fact that more women are choosing to work instead of remaining at home with their children. Higher divorce rates have also meant that women are sometimes unable to take care of their children at home and have no choice but to work to support themselves financially.

The industry shows no signs of slowing down and is set to continue to grow over the next decade. Daycare has proven itself to be surprisingly resilient to recessions in the past.

Many people are drawn into the industry as it offers good opportunities for smaller sized businesses and it generally has low barriers to entry in terms of costs as well as red tape. The top reason that attracts people into daycare though would be a love of children. Daycare professionals work with children for most of the day and have a great chance to contribute to their growth and development.

Training requirements are still quite minimal for daycare workers with most states only requiring a child care certificate that can be achieved with less than 100 hours of study. While many people think that working with children is a dream come true they often discover that it can be more stressful than they originally thought so staff turnover rates are generally higher than other industries.

Parents are becoming more selective about the kind of environment that they want to leave their children in. Most parents now understand that the first four or five years of a child’s life are so important in that they highly influence the way that a child will learn and interact with others and their environment as they get older. Daycare has become much more than babysitting as parents have realized that it is important that their children are in an environment that stimulates learning and mental and physical development. There is definitely a trend in the industry towards quality in this respect.

The future of the daycare industry looks bright and savvy entrepreneurs who are able to balance a love of children with some good business sense should be well rewarded for their efforts.

Are You a Victim of the Financial Services Industry?

Most buyers want to do business with people they can trust: Being trustworthy is key to successful selling. Yet, most salespeople who work in the field of Financial Services have been deliberately and calculatedly misled by their employer- usually a Brokerage Company or an Insurance Company. Is it any wonder that only 3 out of 20 people who enter the field survive?

You are a victim of the financial services industry, if you’ve been told that:

* Plenty of people are making a lot of money in the business.

Truth: About 15% are making a decent living selling financial services, the rest are struggling.

* Most people really need your products and services.

Truth: Most people may need your products or services, but most don’t want to buy them. Unfortunately, insurance companies don’t teach you how to find the High Probability Prospects that do want to buy insurance now. Rather, they want most of their agents to beat the bushes for the low probability prospects – because they work on commission.

* You have to really want to help people in order to be successful.

Truth: Most people don’t want your help.

* You need to become very knowledgeable about the technical aspects of financial services.

Truth: It *is* helpful to understand financial services products. It is much more important, however, to become skilled at Prospecting (a form of Marketing) and Selling.

* It’s easier to learn how to sell than to learn financial planning.

Truth: The reverse is true. It’s easy to find highly competent financial planners who will work on your cases very inexpensively – because they don’t know how to sell.

Salespeople new to the Financial Services industry are usually victimized by some, or all, of these Myths. The result? They work hard, they work diligently – and they sell very little. The neophyte salesperson is blamed for not being persuasive enough, being too thin-skinned, being overly sensitive, or just being lazy.

How do the top salespeople in the Insurance and Brokerage industries survive? How do they succeed in earning six and seven-figure incomes, against the odds? The sales stars that we’ve studied know how to:

* Define target markets – those willing, and able, to buy from you

* Develop a viable prospecting list: A true prospect must meet defined criteria

* Maintain contact with prospects – without annoying them

* When to make appointments – and to avoid wasting time with ‘low probability’ prospects

* Make the ‘numbers game’ work to your advantage

* How to dramatically boost the probability of successfully closing a sale

When you stop being victimized by the Sales Myths perpetuated by your industry, and stop victimizing prospects by perpetuating those myths, you will enjoy real sales success. When you differentiate yourself from your competition, know how to open and maintain real dialogue with prospects, know how to develop mutual trust and respect, and focus your selling efforts only on viable (High Probability) prospects, you can enjoy considerable success. You don’t have to work harder; you have to more competently!

An Overview of the Different Jobs in the Customer Services Industry

There are several levels to the customer service department and if you are looking to enter the field the best thing to do is become informed on your options. This article is designed to help you with making that decision by breaking down the four main departments: customer service assistant (entry level); customer advisor; customer services supervisor and customer services manager.

Customer Service Assistant: This is an entry level position which quite simply involves ensuring that customers leave with a positive view of the company you work for. Almost all businesses employ customer service assistants, from banks to supermarkets so you should be able to find a business that you are sincerely interested in or passionate about. This should impact upon your performance in the role and help you to excel in your position. You will be conversing with customers, and colleagues, face-to-face, over the phone and via email so you must have an excellent grasp of the English language and confidence talking to people. If you are seeking a job with regular daytime hours this may not be position for you as it varies depending on the company. Many businesses are open over the weekend, in the evenings or even over night. The salaries are generally entry level oriented, as a trainee you can expect £8000-£10500pa and at a higher qualified level £9000-£13000pa, but it is all company-dependent. The biggest benefit of this position though is that you get a high level of job satisfaction because you spend the best part of the day helping customers with their enquiries. The only thing you have to remember is that customers can get fairly cross if they are complaining and you will be expected to not only take the brunt of this but also reach an amicable conclusion.

Customer Advisor: If you find yourself often described by others – or yourself – as a ‘chatterbox’ you may find that you also get into trouble at work for excessive talking to your colleagues and therefore a customer advisor position may be right up your street. In this position, generally speaking, the more you talk the better. Your position within the company is to help customers with their enquiries. This could range from informing customers of services that your company deliver, suggesting products they might be interested in, putting them in touch with a senior member of staff if necessary but also promoting your company. As with the customer service assistant position, you will be conversing with customers, and colleagues, face-to-face, over the phone and via email so you must have an excellent grasp of the English language and confidence talking to people. The range of areas that you can work in is slightly broader because you are more likely to work in a more specific industry such as hotels and banks; the level of service needs to be extremely high here. The salary is also a little higher for the same reason; you can expect to begin on £12000-£17000 and progress up to £22000 with more experience. Additionally a lot of businesses offer the chance to earn bonuses or commissions if you perform exceptionally well so the scope to earn well is there for the taking.

Customer Services Supervisor: Essentially this job entails managing a team of staff: making sure they deliver the best level of customer service possible, ensuring they turn up on time and ultimately just do their job correctly. The tasks then branch out and it becomes your responsibility to delegate within the team, monitor performance both of the team and individuals, help with training, development, recruitment and handle complaints from both customers and staff. The worst part about this role is that it is the supervisor’s responsibility to handle those horrible and sometimes serious complaints against your company that you once handed over to the management to deal with. This is significantly more than an entry level job and therefore you can expect the salary to reflect that, when you go in as a junior supervisor you would expect to earn between £15000-£25000pa but again, depending on the company, as you progress through the levels the salary can inflate to up to £40000pa. The good news is there will always be someone senior to you so if there whenever you need advice or help you have someone to call on.

Customer Services Manager: Finally the highest level, the person who takes all the complaints as well as the positives and has to provide the final answer to any query that is causing problems for those further down the ladder. The most important thing about your role is motivating and leading a team to ensure that their customer service skills are the absolute best and the service is being delivered in an efficient and professional manner. In order to fulfil your role the tasks you need to complete have more to do with your staff than the customers. While maintaining good customer relations you must also recruit staff, arrange meetings, training and carry out staff appraisals. The salary for this position is reflective of the experience you have gained throughout your career as well as all the options mentioned in the previous roles – location, department and business. If you know this position is where you ultimately aim to be and choose to start as a trainee in this area you will begin on £16000-£20000pa, more experience will lead to £20000-£40000pa but eventually you could find yourself earning as much as £60000pa. Of course these salaries reflect the responsibilities of the role and when you reach this level it is expected that you deal with the trickiest of situations and reach the most amicable end agreement.