Monday, December 21, 2009

Energy's Place Within Economic Recovery Strategy

A survey of over 100 business owners emphasized cost cutting and innovation as a means to survive this year's economic turmoil. "Energy" is a cost-cutting option, no? Here are the survey highlights:

Postitive outlook; long road ahead. A majority (57%) of business owners see business strengthening, but feel there is a long road ahead. One-fourth of those surveyed believe we have not “seen the bottom” yet.

Most owners take proactive measures to offset declines. Many (77%) owners are taking proactive actions to offset their sales declines. The top five initiatives are:
1. Cost Cutting: 70%
2. Increase advertising/marketing expense: 51%
3. Product innovation: 48%
4. Layoffs: 37%
5. Adjust pricing: 37%

Business growth plans abound. Over 90% of owners believed they can and would initiate plans to grow their business. The top five methods to accomplish this goal were:
1, Grow through increased marketing / promotional efforts: 60%
2. Enhancements to current products/services: 46%
3. New product lines: 37%
4. Increase sales force: 34%
5. New geographic areas: 30%

Owners looking for acquisitions to increase market share %. Growth by merger or acquisition was only ranked 7th (14%) on the methods to achieve growth, and the reasons given for doing so are as follows:
• Increase Market Share: 56%
• Leverage overhead / operations synergies: 47%
• Access to new markets: 47%
• Acquisition of key personnel/gain bench strength: 34%
• Expand product lines and service: 34%
• Leverage Sales Channels: 25%
• New Technologies: 13%
• Acquire established brands: 9%

Finally, as to how businesses rated their ability to obtain necessary funding capital, 60% of respondents were generally positive (6 or higher on a scale of 1-10) that they could raise capital as needed.

This survey is courtesy of Steve Zacharias at Transact Capital Partners. See the full report.

Sunday, December 06, 2009

Industrial Energy Efficiency: An Explanation

Last week, during a facility visit, I encountered yet another opportunity to explain what is meant by the term "energy efficiency." This time, it was a production manager who said to me (in so many words): "Energy efficiency means reducing the energy I need to grow my business." Really.

So I thought about it, and responded this way:

1. Think of your facility-- or any industrial process-- as a money-making machine. You put some tokens in one end, and a revenue product comes out the other. “Energy” is among the tokens you put in.

2. If you compete well in your industry, you either (1) use fewer tokens to get a fixed level of production, OR (2) get an increasing amount of output from a fixed number of tokens.

3. If you HAVE TO put tokens in your machine, wouldn’t it be better if the tokens were dimes instead of quarters? Or nickels instead of dimes? Basically, this is what energy efficiency is all about—not reducing the tokens available to you, but getting the most from the tokens you use.

Okay readers, What's your definition of energy efficiency?


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