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Utilities Costs Are Important
Utilities costs seldom enter in planning efforts by small businesses either considering moving or starting a new enterprise. Often, businesses in one location for years allow their utilities costs to grow without yearly reviews until they are a significant budget item.
Small business utilities are the expenses a business incurs for the services that are required to run it, such as electricity, gas, water, sewage, waste management, and telecommunication services.
Utilities are expected to rise in the future so it is important to plan ahead to cover these essential expenses.
Here are some things to consider about small business utilities:
- Cost: the average cost of utilities for a small business is around $2.14 per square foot per month. However, this cost can vary depending on many factors, such as the size of the space, the age of the appliances, the climate, and the building’s energy efficiency. More specifically,
Electricity: The average price of electricity for small businesses in the U.S. is 12.76 cents per kilowatt-hour (kWh). However, electricity rates can vary by provider, plan, and location. States with the lowest cost of electricity include:
The states with the lowest electricity costs are generally in the central and northwest regions of the US. Some of the states with the lowest electricity rates include: North Dakota (7.41 cents per kWh), Nebraska (9.85 cents per kWh), Louisiana, Idaho, Utah, Wyoming, Iowa, Idaho, and Oklahoma. Hawaii has the highest average electricity rate in the US.
Gas: readily available supply lowers the cost of natural gas.
States with the lowest cost of natural gas include Texas, Oklahoma, Louisiana, and North Dakota; these states are major natural gas producers. The state with the highest price of natural gas is Hawaii ($28.4 per thousand cubic feet).
Water: factors that affect water costs include: local water supply infrastructure, treatment costs, state regulations, population density, proximity to water and abundancy, and energy costs.
Vermont and Wisconsin have the lowest cost for water with average water costs at $18. While West Virginia has the highest cost for water.
Sewage: wastewater treatment costs have increased by about 4% each year for the past 12 years. Wastewater bills are usually higher than water bills because of the complexities of wastewater treatment.
Illinois has the lowest average monthly sewer bill in the United States, at $74.97. This may be due to the state’s wastewater management systems or regulations.
Waste management: the costs of industrial waste management and commercial garbage disposal can vary widely based on your business location and the way you manage your contracts.
Connecticut is the top-ranked state for waste management, with Minnesota and Washington also ranking highly. These states are known for their waste management policies, and many are also leaders in recycling and Pay-As-You-Throw programs.
Telecommunication services: communications tax laws can be complex and vary by state, even for states that don’t have a statewide sales tax. This is due to the many agencies, rates, fees, and surcharges involved.
Delaware, Nevada, and Idaho are among the states with the lowest wireless taxes in the United States.
- Energy efficiency: businesses can save money on energy bills by choosing a plan that’s tailored to their energy usage. They can also consider using zone heating, insulating the business, and using programmable thermostats.
- Payment: it is important to pay utility bills promptly, as the utility provider could shut off the service if the bill isn’t paid.
- Credit: new businesses or businesses with poor credit may need to pay a deposit to set up electricity. Some providers may also allow a letter of good credit, recent utility bills, or a personal credit check.
Review your businesses utilities before the New Year to ensure you are being cost and energy efficient.