What's Your SER?
What’s you SER score? Your SER, that’s your Sales to Energy Ratio, is the percent of your sales it takes to pay your company energy expenses. The lower the ratio the lower amount you spend, sort of like golf where a low score is best! Companies with energy educated staff typically score well, where those who lack that education are often wasting considerably higher amounts of cash on their energy costs than is necessary. But in business you don’t get a handicap for a poor score.

Consider this: let’s say that a big box store spends $30,000 per month on energy and they have a net profit of about 8%. Realizing that the $30,000 monthly costs are already included in the 8% profitability, we can still see what a difference saving a little can make in regard to the company’s SER. Sadly, too many CFOs, CEOs and owners are not aware of the simple solutions for this common problem. When the CFO or owner gets their critical staff educated in energy efficiency, those benefits far outweigh the benefits of the extra advertising and reduced prices that are typically required to increase sales. As a matter of fact, quite often, extended advertising decreases profits while increasing sales. Where, on the other hand, energy education leaves sales at their current state but increases profits.

$30,000 per month based on 8% net profit equates to roughly $375,000 per month in sales or 4.5 Million dollars in annual sales required to cover the cost of electricity. Sure, the electricity is already factored into the net profit, but even if you remove the electricity from the equation on the net profit, you’re still looking at around 3 Million dollars of annual sales just to cover the electrical costs, give or take a bit. If you reduce your energy cost by as little as 5% percent in this situation you will increase profits $1500 per month. Doesn’t sound like much until you factor your SER. At 8% net profit $1500 translates to around $18,750 per month in sales or $225,000 in annual sales. If someone offered you $1500 per month increase in salary would you take it? How much do you have to spend in advertising to generate an additional $225,000 in sales? Would you have to slash prices to get those sales?

Here’s an example of how this can make a life or death difference an organization that currently does not have any one on their staff with the solid energy understanding that is obtained through good energy education and the proper energy management obtained through that education.

Example:
Grocery store with 20,000 Sq. Ft. has daily operations that have been in place for years. The company is profitable, so everyone is happy. All employees are getting paid well and on time, the top brass at the company are getting paid well and everyone is pleased. But what’s missing here is that underneath this seemingly perfect retail-fairy-tale lurks the menacing energy monster slowly eating away at your company profits. As the world becomes more competitive and energy costs rise, while good for now, unrealized by the company brass, the profits are slowly eroding. There are no bread crumbs in this story to find your way out of this mess. Eventually this operation will be consumed by rising costs, unless someone sees the ensuing problem before it becomes a problem when it’s too late to turn things around.

The above scenario is common these days, and what occurs is that when the company is still in a position to spend-a-little-to-save-a-lot they are asleep at the wheel. When finally, they see the impending doom, they no longer have the funds required to reduce energy costs due to all of the previously wasted energy expenses. This is common in companies whose employees lack the awareness presented with a great Energy Education. Getting a robust energy education is easy in our modern world because you can take online energy management courses that require only a few minutes per day and cost very little but yet deliver tremendous savings. Depending upon monthly energy expenditures, many companies get payback for educating their employees in energy management, and thus reducing their SER, in just a matter of weeks. The larger the company the more valuable the education. Having people on staff who have completed courses in energy management education who are placed in every department in any organization will produce savings, and depending upon the energy circumstances those savings can easily be as high as 30% of energy costs, even higher in some cases. Now is the time to get your staff educated in Energy Management before impending doom is knocking at the door of the company you are responsible for. Are you asleep at the wheel? What’s your SER?

An SER score is not something that can be specifically indexed because different types of businesses have different energy needs, and a big box chain store in the frigid winters of Wisconsin will have different energy needs as the same sized identical big box store in Sunny southern California. When you check your SER score you are always competing with your own store trying to outdo the previous year’s numbers. If you are in a chain or franchise establishment start talking with fellow CFOs, managers, or fellow owners and compare your SERs, most people we talk to are surprised what they find.

The SER is typically overlooked because energy is a staple without which most businesses cannot function. And thus, it is assumed that there is little or nothing that can be done in that area of expenses. Nothing could be further from the truth! There is a great deal that can be done, but most people are unaware because, these days, culturally, we are all worried about being “green” and are wasting a great deal of our own money and tax payer’s money on our subsidized solar panels and wind generators. There is nothing wrong with these products and their methods of energy generation, but if the same amount of money had been spent doing real “Green Energy” the difference will be profound and will typically save your company enormous amounts of money. What is “Real Green Energy”?

True Green Energy that is real is and not subsidized is the energy that you never used because you are not needlessly wasting it through poor energy management. Get your staff properly trained in Energy Management today and change your company’s future long-term.

Don't forget to check your Sales to Energy Ratio!. A great SER can save you more than you would expect.
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Your Sales to Energy Ratio
SER
is one of the most important aspects to understand about your energy use.
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