Buying Energy: What should you expect from your advisors?

With increasing complexity in the energy market, more and more businesses are engaging the services of TPIs (Third Party Intermediaries) to guide them through the process of energy procurement.

During more than a decade of sometimes confused energy policy in pursuit of managing the so-called “trilemma” (security of supply, affordable costs and a transition to a low carbon system to meet climate change targets), we have seen layer upon layer of legislation and the introduction of several new levies and subsidies.

Tipping Point

In a typical power bill, non-commodity or “pass through” costs now exceed the cost of energy and are anticipated to comprise 60% of the total bill before too long. Energy suppliers have had to respond to these changes, developing a range of different products – particularly in terms of electricity contracts – to suit different needs. At the same time, there has been a proliferation of new entrants to the supply market in both the commercial and domestic arenas.

It is no wonder then that consumers turn to TPIs for guidance when facing the (normally) annual review process. But as a business, what should you look for when you are choosing a TPI?

  • A Proactive Approach: Nobody can tell what the future market holds, but it pays to start the contract review and renewal process well in advance of contract anniversary dates. Leaving renewals to the last minute renders the consumer a hostage to prevailing market forces. Equally your TPI should discuss and understand your needs and attitude to risk, to ensure that you select the right product. A fully fixed product will likely cost more up front but give you budgetary certainty and no risk, whereas a pass through contract will have a far lower risk premium built in but could expose the consumer to unforeseen costs.
  • Market Knowledge: A TPI should be able to put you in a position of taking well informed purchasing decisions based on a thorough knowledge of the dynamics driving the wholesale energy market. So the real value comes in choosing WHEN to buy, the ideal contract length, how far ahead to approach the market and product type.
  • Transparency and Independence: This seems almost too obvious to state, but the consumer should have absolute clarity as to the cost of engaging a TPI. Oddly enough this is often not the case and therefore the customer has no real way to determine if they are achieving value for money. There should be a clear delineation between the cost of energy and the TPI’s cost to serve which should be agreed and understood before any work begins. It should also go without saying that the TPI should cover the market as widely as is appropriate for the enquiry.
  • Ongoing Support and Portfolio Management: There is no “one size fits all” approach, but once the energy procurement has been done the sometimes less glamorous but no less important work of portfolio management should be given equal attention. This may involve portfolio alignment, troubleshooting supplier issues, managing changes of tenancy, bill checking and cost and consumption reporting as required.
  • A Good Partnership: No matter what business sector you are in from SME to Industrial and Commercial, you should seek a good working partnership with your TPI. Energy costs are far too important to simply delegate, but the intricacies of energy procurement do require specialist assistance and can help free up valuable time for the client to focus on their core business.

For more information, please contact us.


Article by: Richard Clayton

Article from Market Intelligence 17.3, click here to view the whole newsletter.

The post Buying Energy: What should you expect from your advisors? appeared first on Expense Reduction Analysts.

from Expense Reduction Analysts http://www.expense-reduction.co.uk/2017/08/buying-energy-expect-advisors/

The Rising Cost of Doing Business: The profit challenge

In a landscape where costs are rising, it’s inevitable that whether you’re a profit making firm or an institution, budgets and/or margin are being squeezed.

As rising costs hit the economy and an increase in inflation looks likely, what are the options you have?

  • Raise prices: Contribute to inflation whilst losing market share. So a ‘no’.
  • Rationalise’ staff: Less effective at increasing EBITDA than reducing non-labour overheads.
  • Cut profit: We’re sure your shareholders will accept it and it will only be this year, …right?
  • Reduce costs: Identify and realise genuine cost savings to resurrect budget & morale.

We believe the best way to react to these circumstances is to pro-actively manage the full depth and breadth of your cost base.

Uncertainty is currently a fact of life, for people and businesses, even more so since the UK’s vote to leave the EU. Businesses may find it harder than ever to predict the future, but they can still manage it.

Smart companies realise that procurement can help them do this.

 

 

Today a typical cost split, bearing in mind staff, raw materials / goods for resale and overhead costs might look like the graphic above. In this example, we’re depicting a business that generates a fairly typical 5% profit margin on their overall turnover.

With the impact of a range of increases to general operating costs from both legislative and market changes, that organisation faces the potential of a profit squeeze to perhaps 1% in the future.

Many organisations will respond in the only way they can, raise prices to reflect increased input costs and face the potential of lost market share to organisations prepared to be more innovative.

By engaging with ERA and reducing your overall overhead costs by an average of 20%, responsible companies can in fact gain market share and drive back down the cost of doing business and ensure the profits you enjoy today remain for the future.

 

For more information, please contact us.

Article from our ‘Rising Cost of Doing Business’ White Paper, click here to view the whole paper.

The post The Rising Cost of Doing Business: The profit challenge appeared first on Expense Reduction Analysts.

from Expense Reduction Analysts http://www.expense-reduction.co.uk/2017/08/rcodb-the-profit-challenge/

10 Clothing Franchise Opportunities to Try on For Size

10 Clothing Franchise Opportunities Available Now

Starting a retail clothing business comes with a lot of risk and overhead. But there’s slightly less risk if you can find a good brand to franchise with. There’s a wide array of clothing franchise opportunities out there. Here are 10 options to consider.

Clothing Franchise Opportunities

Gap Inc.

10 Clothing Franchise Opportunities Available Now - Gap Inc.

Gap Inc. runs some of the most recognizable names in fashion retail, including the Gap, Old Navy, Athleta and Banana Republic. The company is expanding into select international markets through franchising, though it doesn’t offer franchise opportunities in the U.S. or other countries where it has company run stores. You also need extensive business experience to be considered.

Plato’s Closet

10 Clothing Franchise Opportunities Available Now - Plato’s Closet

Plato’s Closet is a chain of clothing stores that focus on gently used clothing that is still fashionable. The initial investment is between $150,000 and $500,000. And there are also opportunities for franchisees to invest in multiple locations.

Mainstream Boutique

10 Clothing Franchise Opportunities Available Now - Mainstream Boutique

Mainstream Boutique is a women’s fashion brand that offers opportunities for franchisees who want to really connect with their customers and offer quality products. The initial franchise fee ranges from $18,000 to $35,000.

Once Upon a Child

10 Clothing Franchise Opportunities Available Now - Once Upon a Child

Once Upon a Child is a chain of stores that sells gently used kids’ clothing, toys and other children’s items. Franchisees need a minimum of $75,000 in cash or liquid assets in order to get started.

Hometown Threads

10 Clothing Franchise Opportunities Available Now - Hometown Threads

Hometown Threads is a clothing business that lets customers order custom embroidery, monograms and other custom items. The company has a handful of franchise locations around the country and is currently accepting new franchisees.

Instant Imprints

10 Clothing Franchise Opportunities Available Now - Instant Imprints

Instant Imprints is another franchise business that offers custom apparel and similar products that can be used for promotional purposes, group outings and more. Franchisees must have at least $100,000 in liquid capital to get started.

Apricot Lane Boutique

10 Clothing Franchise Opportunities Available Now - Apricot Lane Boutique

Apricot Lane Boutique is a business that features fashion forward retail stores in shopping centers and high traffic areas. The initial franchise fee is $34,500 and it includes training, technology and a recognizable brand name.

Kid to Kid

10 Clothing Franchise Opportunities Available Now - Kid to Kid

Kid to Kid offers a resale franchise opportunity for those interested in owning a family friendly business. The company has plenty of prime territories available. And the initial investment ranges from $247,980 to $373,480.

Big Frog

10 Clothing Franchise Opportunities Available Now - Big Frog

Big Frog is a clothing franchise that offers custom t-shirts and more. The initial franchise fee is $39,500. And the company also requires franchisees to have about $50,000 on hand for working capital when starting out.

Pro Image Sports

10 Clothing Franchise Opportunities Available Now - Pro Image Sports

Pro Image Sports is a franchise that sells officially licensed merchandise from professional sports teams, including jerseys and other apparel and accessories. The company charges $30,000 for its initial franchise fee, with a smaller fee for any additional stores.

Clothing Rack Photo via Shutterstock

This article, “10 Clothing Franchise Opportunities to Try on For Size” was first published on Small Business Trends

via Franchise – Small Business Trends https://smallbiztrends.com/2017/08/clothing-franchise-opportunities.html

Managed Print: rental contract overcharges

During more than 25 years within the Managed Print Industry as an Account Manager, I was always diligent in making sure that my clients were aware of when their minimum contract ended.

As their Account Manager, I felt it was my duty to ensure they were aware of the minimum term and both the period and the process by which they could give notice to terminate the contract.

Sometimes, I would retain the business, but sometimes that business would go elsewhere. Importantly, I kept the client aware of their obligation so they always had the option of exercising the right to terminate the contract.

Since joining ERA 4 years ago and operating as a Managed Print Procurement Consultant, I have been staggered at just how many clients have been misled, incorrectly advised or ignored completely when ending their contracts. Since then, I have identified and recovered nearly £130,000 of rental refunds for different clients. In all these cases, the clients were unaware that these refunds were due – their suppliers had certainly not made them explicitly aware of them – and on contracts they would still be overpaying for had we not got involved on their behalf.

Lease agreement cancellation

All finance companies require normally a 90 day notice period to cancel their lease agreement at the end of the primary rental period.

For example: a company with a 36 month lease agreement is required to give at least 90 days’ notice prior to the end of the primary term, otherwise the rental agreement would continue into a secondary lease at the same rate. In all the overcharges that I have identified, the clients were incorrectly informed by their supplier that they would cancel the lease agreement on their behalf.

But here’s the key: the finance company will only accept the notice period directly from their client and not the supplier, so the result has been that whilst the companies concerned thought that their contracts had been cancelled, the reality was that, unbeknownst to them, they had entered into a secondary lease term, running alongside their new lease, thus making them liable for two concurrent lease payments.

Remarkable frequency

I’ve found it remarkable that nearly 1 in 3 of the contracts analysed since I joined ERA have resulted in overpayments being identified. Some have been overpaying unnecessarily for more than eight years! Of course it is true that the companies concerned had a responsibility to check that they had cancelled their agreements, read their terms and conditions, and understood their contract terms. It is however, very easy indeed for contractual terms to be overlooked months and years into a contract and due refunds and cancellation dates to be missed.

But both the supplier and finance companies also have a responsibility to their clients to check whether the contracts have been cancelled correctly at the end of the primary term. Without our involvement, many of the refunds obtained would not only have not been identified but also not been returned, as it is very difficult four or five years later to
obtain refunds.

Sadly, the industry has a poor reputation and there are many, many companies who are being overcharged and it looks like there is no sign of any improvement. For more information on how my experience could generate due refunds, develop sustainable solutions with reliable and honest suppliers and provide cash savings, feel free to get in touch.


Article by: Andrew Kinnear

Article from Market Intelligence 17.3, click here to view the whole newsletter.

The post Managed Print: rental contract overcharges appeared first on Expense Reduction Analysts.

from Expense Reduction Analysts http://www.expense-reduction.co.uk/2017/08/managed-print-rental-contract-overcharges/