Anthony O’Brien

NAME: Mel and Frank Pentimalli.

BUSINESS: Café Expresso, East Gosford.

QUESTION: We’re a husband-and-wife team and have been in business now for 10 years in East Gosford on the Central Coast of NSW. We pride ourselves on our great coffee, which our regular customers tell us is as good as the best brews in Melbourne. We generate great business from our local community through word of mouth, and we’ve built a nice little asset with excellent turnover.

However, electricity charges and merchant fees are probably the most significant challenges to our cash flow. Any tips about how we can cut our merchant fees and electricity bills would be appreciated.

1 Check your power plan

Thanks for your letter and congratulations on your business success. Households are being hammered by rising power costs but so are businesses like yours. According to comparison site Canstar, that’s prompted 42% of small businesses to negotiate the power plan they have with their current provider.

AGL, for instance, offers a Business Everyday plan, which comes with a guaranteed 17% discount on both usage and supply charges for 24 months. Or the AGL Business Savers plan delivers a saving of 24% on usage charges over the first two years. Talk to your current provider to see what it can offer to help you.

2 Switch to a new provider

Just as consumers can shop around for a better power plan, so can businesses. Along with the big names such as Origin and EnergyAustralia, there’s a variety of smaller players such as QEnergy and Blue NRG that specialise in supplying small businesses.

Not every provider is available in all areas. However, in East Gosford, QEnergy offers a Flexi Biz plan, which it claims can save a small business up to $6185 in annual power costs. QEnergy also offers a no-obligation analysis of your electricity charges.

3 Review your equipment

A quick chat with a licensed sparky confirmed what Mel and Frank probably already know: cafe equipment, notably espresso machines, can pull some serious amps. Manufacturers recognise that energy efficiency is becoming an increasingly desirable feature of commercial kitchen equipment. For example, some of the newer espresso machines from the Dalla Corte range claim to use 50% less power.

If you have older, power-hungry appliances, it could be worth upgrading to more energy-efficient models. Yes, it’s a big outlay (and hopefully it won’t compromise the quality of your coffee) but the $20,000 instant asset write-off has been extended for another 12 months, so you could enjoy a tax break now plus longterm savings on power.

Don’t just look at specialist cafe equipment. Fridges, your hot water system and even lighting all have the potential to ramp up your power bill.

4 Smash those merchant fees Anthony’s tips

We’re increasingly using tap-andgo to pay for small purchases like a coffee. It’s convenient for consumers but costly for businesses, which have forked out higher merchant fees for contactless payments compared to when a card is swiped or inserted. That’s largely because the infrastructure that could handle tap-and-go belonged to either Visa or Mastercard, though EFTPOS has recently come on board to boost competition.

Specialist bank Tyro, which focuses on small to medium enterprises, has launched leastcost routing via the EFTPOS network, which it claims can save businesses an average of more than 6% on merchant service fees, rising to a possible 8.8% for hospitality businesses.

Anthony O’Brien is a small business and personal finance writer with 20-plus years’ experience in the communication industry.