What Is Considered a Business Utility Expense?

 November 22, 2022

By  Kyrie Mattos

All organizations incur high costs for commercial utilities, but it can be tough to determine whether you’re spending too much.

Companies frequently believe their utility costs are reasonable or normal when, in reality, they are being overcharged for a variety of potential causes. While uncovering where you may be overpaying for utilities requires expert-level knowledge and a complete utility audit.

However, looking into what business utilities are and how they are priced is useful to comprehend the utility industry truly. You may take more control and become more aware of your spending when you understand what and how these utilities are priced, which you can read about in this article.

What Exactly Are Business Utility Expenses?

Along with their regular operational costs, business owners frequently have to deal with complicated and expensive electricity bills. Commercial premises often require various services, including power, heating and cooling, water, trash removal, security, and much more.

These expenses might be much more than their traditional counterparts if you are financing the sustainability of your business.

According to various criteria, including location, industry, energy use, square footage, and so many more, utility expenses for company owners can vary greatly. Any expenditure associated with using utilities over a reporting period might be considered a business utility expense.

Typically, these consist of the following:

  • Gas
  • Telecom
  • Water
  • Electricity
  • Waste management
  • Sewage

Your utility costs typically consist of a fixed amount and a variable amount. Variable expenses are determined by your utility consumption, whereas fixed expenses depend on the services and infrastructure required to deliver the specified utilities.

Your utility costs will also be affected by taxes and other additional fees, which vary by state.

The Average Expense of Utilities Per Square Foot

As you probably know by now, your industry, utility usage, business size (whether you are a small or big business), and location all affect your utility expenses per square foot.

So this can make it quite challenging to offer precise information on typical utility prices across industries due to the significant variation these elements have from business to business.

However, if you start looking into utility pricing, you can identify areas where you can save money. Plus, you can compare the energy prices with different providers to see if you are paying extra. One way to do this is by having a business energy comparison, and you can save a significant amount of money and energy.

Standard Utility Cost For Businesses

The typical utility cost for a business building is $2.14, specifically for energy use per square foot. For most businesses, lighting and HVAC systems are said to be the two most crucial parts.

However, the price of utilities for a company such as yours will differ depending on the nature of your business and the industry in which you operate.

For instance, a restaurant will likely have higher power costs from large appliances than a retailer, and a florist will undoubtedly use much more water than an accounting section of the office.

Tips To Lower Your Business Utility Expenses

1. Try Energy Audit

A professional evaluation of your current energy use and recommendations for using energy more effectively and saving money defines an energy audit.

After the audit, you’ll know where you are in terms of efficiency and what steps you can take to reduce your utility expenditures.

2. Try A Nighttime Audit

This self-run audit tries to identify opportunities for you to lower your energy use at night to lower your power bills.

Pick any random or unexpected evening to do the audit, and give any self-managed equipment a couple of hours to shut down after all your employees have left.

Then, go throughout the office to determine whether any lights and operating equipment are required overnight; if not, you can turn them off immediately.

3. Always Use Power Save Mode

When using your computers, laptops, or other electronic devices in your office, make sure that it is being utilized in power save mode.

It will also ensure that all the electronic equipment can shut off immediately and the devices go to sleep when they are not being used.

It will also be more beneficial if you inform all your staff members to turn off every electronic device before leaving the office or before going on any vacation or a long holiday.

4. Turn off the Lights In The Morning

It is always advised that people use natural daylight whenever it is possible instead of turning on lights in space.

Make this into a habit, and you will benefit a lot. You can even encourage the employees to do this, which as a result, will save you a lot of power as well as money on your next utility bill.

5. Stairs Instead Of Elevators

Not only will this keep you and your employees more active and healthy, but it will also help save more energy.

6. Clean All the Vents

It requires much more electricity to move the hot or cold air through your room when paper or furniture covers the air intake vents in your office.

To guarantee that the areas in the front of your vents remain clear, keep them clean and do routine inspections.

7. Repair Air Leaks

Fixing air leaks around the doors and windows of your business is a proven way to lower your utility costs. There are several methods for finding air leaks; once you do, seal it up.

8. Install Programmable Thermostat

You should replace your thermostat if it only allows you to set the temperature and doesn’t allow you to do anything else or make any changes. Those are old thermostats that will take up a lot of energy.

With the help of a programmable thermostat, you may set various temperatures for weekdays and weekends, which certainly have the potential to save your utility costs.

9. Change the light bulbs

You should switch to energy-efficient light bulbs if you’re still using the same kinds of bulbs that you did ten years ago.

There are numerous possibilities, and despite the initial costs, this adjustment is known to influence your utility bill significantly.


You probably know by now that it is quite challenging to determine a business utility expense because there are a lot of variables that need to be taken into consideration.

You can still do it with the help of an energy audit or through the help of an energy expert. This will help you determine how much energy you are using and what changes you should make to save money for your next bill.

Kyrie Mattos


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