Companies cutting costs by sharing space

Succeeding in small business

March 23, 1992|By Jane Applegate | Jane Applegate,Los Angeles Times Syndicate

You didn't see it on Cable News Network, but Vince DiMeglio's N.Y. Cheesecake bakery in El Toro, Calif., was a casualty of the Persian Gulf War.

Overly dependent on customers in the military, sales plummeted when the war broke out. Mr. DiMeglio closed the store and retreated to his 15-year-old Costa Mesa, Calif., location.

"In these times, we had to find a way to lower our costs without affecting the quality of our cheesecake and cheesecake-on-a-stick," Mr. DiMeglio said.

His solution is among several ways to save money on office space and energy costs: sharing space and splitting rent and utility costs with a compatible, non-competing business.

Mr. DiMeglio was approached by a fellow baker looking for a commercial bakery.

"We were knocking on doors around Orange County, looking for someone to share space with," said Michael Gaudette, a partner in the year-old Pacific Coast Baking Co. "At first, Vince wasn't too keen on the idea, but then, he was willing to give it a try."

The bakers' space-sharing arrangement benefits everyone. Mr. DiMeglio bakes and sells cheesecake at the 19th St. bakery between 10 a.m. and 6 p.m. After 6 p.m., bakers from Pacific Coast fire up the ovens to produce a line of gourmet fudge brownies and cookies.

"We have a verbal agreement about sharing the rent and utilities," Mr. Gaudette said. "This way, he helps my business and I help his business."

If sharing your production space isn't an option for your business, how about renting out excess office or warehouse space to another business? Professionals, such as doctors and attorneys, have long shared office space, receptionists and conference rooms. If you put the word out to friends and colleagues, you may find a compatible partner sooner than you think.

Even if you can't share your space, you can come up with affordable ways to cut your energy costs. First, ask all your employees for their energy-saving ideas. Some may be as simple as shutting off the lights in the bathrooms or lunch room when no one is there.

Weather-stripping, caulking, double-paned windows, insulation and light timers all contribute to energy savings.

You'll not only save money, but reduce air pollution and show your employees that you are concerned about the environment.

You might also consider replacing your existing lights with new, energy-efficient fluorescent bulbs. Although the new bulbs cost up to 25 times more than conventional bulbs, they last 10 times longer and use a fourth as much electricity. In fact, California Gov. Pete Wilson recently ordered the state to buy $90 million worth of new light bulbs to save an estimated $765 million over the next five years.

Adding reflector panels to your new energy-saving fluorescent lights is another proven way to cut your electric bill.

Zaven Demirjian, owner of The Carpet Showcase in Northridge, Calif., reduced his monthly electric bill from $1,200 to between $500 and $600 by replacing his lighting system with new lamps and 3M Silverlux reflectors.

"The electric bill kept going up and up and I didn't know what to do," said Mr. Demirjian, who bought his lighting system from Pacific Energy Management in Costa Mesa.

His obsolete, 25-year-old fluorescent lighting system not only cost him more, but their cool light washed out the colors of his showroom carpeting. The old system also threw off so much heat he had to keep the air conditioner on much of the time.

Mr. Demirjian invested $7,000 on a new lighting system for his 4,000-square-foot showroom. His monthly payments for the lights is $198. "I pay for the lights and still save $300 for myself," he said.

For a free copy of Jane Applegate's "Small Business Owner's Resource Guide," send a self-addressed, envelope with 29 cents postage to: Jane Applegate, P.O. Box 637, Sun Valley, Calif. 91353-0637. Jane Applegate also welcomes letters and story suggestions from readers.

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