In this regular blog series, Bob Hall, the co-founder of Greenlite Lighting Solutions, makes sure you aren’t left in the dark about the lighting sector. This month, he says: Retailers need to see the light when it comes to funding options open to them.
Few things baffle me more than the lack of uptake of lighting leasing plans. Designed to enable companies to install energy-efficient lighting with no up-front payment, these finance solutions are both cost-effective and environmentally beneficial. Yet they remain undersubscribed – the proverbial wallflower at the disco!
Luckily, the industry is finally waking up to the fact that finance works. But for every company that takes advantage of financing, there are many more that aren’t giving these schemes the green light. So why should you consider one?
First of all, finance plans help you spread the cost of an investment in commercial low-energy lighting across its whole lifespan. In doing so, businesses are realising that it’s really worth taking a long-term perspective.
Typically, lighting suppliers will talk to you about payback in a short-term context. For example, if you are spending £10,000 on lighting and you save £5,000 a year in energy costs, then it’s easy to call it a two-year payback. But is this really so important? Are you going to throw out this lighting after two years? Of course not – the average store refurbishment is every five to eight years! Taking a whole life cost perspective illustrates that paying for your lighting in instalments – using the money you are saving – makes much more financial sense.
As an expert in retail lighting, I also know that lighting is a fixed asset to your business – but it’s a depreciating asset. Why use business capital to fund an asset that’s value decreases over time? People will often say to me, ‘But we don’t use finance.’ To which I reply, ‘Codswallop! Is your photocopier bought or leased?’ The answer is always the latter! Finance definitely has its place for these kinds of purchases.
It’s also worth looking to other successful businesses as your guiding light. The top 50 FTSE100 Companies have approximately £94bn of lease agreements. And these are the people to be copying! But if you still aren’t sure if finance is for you, join me next month to find out more…