Small businesses conserve energy to curb costs

Rising energy costs are forcing some companies to shorten their operating hours — a sacrifice in particular for restaurants that pride themselves on being open 24/7.

Phil Greifeld, chief executive officer of the Huddle House restaurant chain, said the company is allowing its less-profitable franchisees to close at midnight, although Huddle House has advertised itself as "always open, always fresh, 24 hours a day."

"There was a lot of internal debate about it, but it's a good thing we did that in terms of helping people to control their costs," Greifeld said. The result: Those restaurants that are closing at midnight are making more money.

Other steps Atlanta-based Huddle House is taking include reconfiguring its seating arrangements, to allow restaurants to accommodate more customers and increase their volume. The company, which has 440 restaurants in 17 states, is also working with equipment manufacturers on burners that turn the gas on when a pan is placed on the stove and turn it off when a pan is removed.

"It really does add up" in saving money on energy, Greifeld said, and added about cutting costs, "it's something you have to work on day in and day out."

While businesses try to cut costs as much as possible, most are ultimately forced to pass some of the higher energy prices on to customers. Delivery charges are going up, manufacturers are repricing their goods and restaurants are raising their menu prices. Generally, small business owners say their customers understand — energy prices are going up for them as well.

Waldemar uses independent delivery drivers for his Norfolk, Va., Wing Zone stores, and they're asking for more money per trip. "Eventually, it's passed on to the consumer, because that's how it works," he said.

But Waldemar is also contending with rising fuel costs for cooking the chicken wings and other food he sells, plus higher electricity prices. He estimates that his propane costs alone have risen 30 percent to 40 percent over the past year.

So, one solution is to turn off unused fryers during down times.

"There's only so much I can do," Waldemar said.

He's also looking at more fuel-efficient equipment as he plans to expand. He has two stores now, and plans to open one more in January and another in March.

Raising prices isn't easy, though, for many small business owners, because of the competition they face. Whitmore noted that his pricing is expressed in minutes — the number of minutes a customer gets of dryer time per quarter. He can cut the drying time only so much before customers, who tend to be lower-income and not able to pay much more, might go elsewhere.

"We're in a competitive market, and our competitors are not always eager to play ball," he said.

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