Like any business, we like to end the year with a little profit. But we also like to have enough money, before profit, to improve our infrastructure. In years past it was a new roof, a new parking lot, Aeron chairs for everyone. Those were the good old days.
Making improvements to your infrastructure is important. It lets your people know you care about them, and they appreciate the benefits from your expenditures. It can also be a very smart move financially. Example: we bought and installed two large monitors on every desk at HBS and everyone thanked me for months afterwards. The simple truth was, it made their jobs easier, which made them more efficient. They now provide services to our clients over the phone much more quickly, with multiple screens up at once, and clients are pleased at the speed with which our people can now create real-time data from the State of Delaware and our own client database. That improvement was a wise investment for many reasons.
This year, 2010, we used our infrastructure reserve fund to hedge against two distinct potential threats: rapidly inflating future energy costs and a potential interruption in the supply of electricity from our regional grid.
Regarding the first concern, skyrocketing projected energy costs for Americans:
Americans have enjoyed low energy costs for many decades due to our power to buy in enormous volumes, our good credit, and our stable currency. (Oh, so THAT’S why it’s going to skyrocket!) Well, I’m no MacroGlobal Economist but it is pretty clear that the cost of energy is now on the launching pad, ready for take-off. Prepare yourself and plan for your company.
You’re not too late, even though some government credits will not be available next year. 2011 is a “Get ‘er Done!” year for renewable power. There are two options for reducing dependence on your energy supplier by producing your own sustainable energy: solar and wind. At this time turbines and photovoltaic cells will supply you with a very small percentage of your total electric power, if you’re a small American business with over a million dollars in overhead. But State and Federal tax credits and Renewable Energy Credits (RECs) will return a big percentage of your investment over the next fifteen years (maybe even all of it), which gives you 5 years of free energy (at prices fifteen years out), figuring the life of the system will be about twenty years. This year, this expenditure was our #1 priority for infrastructure improvement.
Second was the purchase of a 100 KW Kohler back-up generator that stands five feet six inches high and is 11 ½ feet long by four feet wide (see photo above). This baby has a Corvette Vortec 8.1 Liter (496 CI) engine powered by propane from an on-site 1,000 gallon reserve tank that will carry the electricity