updated 1/14/2004 4:02:35 PM ET 2004-01-14T21:02:35

With parts of the country already suffering through bitter cold, small business owners are caught between the need to keep their offices and buildings warm and the need to save money.

If it's too cold at your company or you're spending too much on heating, there are steps you can take to improve the situation. What you're able to do might be somewhat limited, however, if you rent rather than own the premises.

Either way, the first thing to do is figure out why it's cold inside. Chances are you've got drafts from windows, doors, the roof, floors and even cracks in the walls that are letting the cold air in and allowing warm air to escape.

The solution to this problem is easy and can be done immediately: weather-strip, caulk and insulate the place, making it as airtight as possible.

Even if you spend a relatively small amount, you can do a lot to make yourself and employees more comfortable. As the utility Public Service of New Hampshire says in its Web site, "these measures should be the first line of attack against wasting energy."

If you opt for a major insulation project, the Internet can help you decide what kind of insulation you need. The North American Insulation Manufacturers Association Web site at www.simplyinsulate.com has state-by-state information.

The Web is a good source for information on many aspects of energy savings. The site for the Alliance to Save Energy, www.ase.org, has tips and calculators on energy savings and has links to other sites. Some utilities also offer small businesses online help, among them Public Service of New Hampshire at www.psnh.com/Business/SmallBusiness/ReduceBill.asp. Also look at sites that offer advice to homeowners.

And don't overlook the U.S. Department of Energy. Its Energy Efficiency and Renewable Energy site, www.eere.energy.gov/consumerinfo, has a lot of helpful tips. For example, its advice includes insulating cooling and heating ducts; if your heated air is passing through cold spaces, it will cool off rapidly.

Your problem might be that the building's heating system isn't what it used to be. Obviously this is not the optimum time of the year to replace it _ unless it is broken beyond repair and you have no choice _ but you can and should get it serviced. Even the simple task of replacing an air filter on a furnace will save you money because the furnace will operate more efficiently.

If the heating system is the problem, but you don't own the building, it will be hard for you to get it repaired or replaced unless the landlord agrees. So you're going to need to do some negotiating with the landlord.

Some other options are simple and free and just require a little common sense. Open the blinds and shades as fully as possible to let in the sunlight, which will warm up the office during the day. If the door to your business opens to the outside and us used frequently, consider building an enclosure around it that will cut down on some of the drafts; some restaurants have such enclosures so patrons seated near the front door don't freeze.

You might be tempted to buy electric space heaters, and for some businesses, that might be a sensible option. They'll help warm up small and medium-sized rooms. But they are expensive to operate and should be a last resort. You're probably better off tackling the cold problem at the source.

Whatever steps you take, remember that your investment in energy savings is tax deductible. But remember that if you decide to do something major like replace the heating system or install double-paned windows, such improvements must be amortized. They don't qualify for a Section 179 small business equipment tax deduction, since they are an integral part of a building.

If you have a home-based business, any money you put into keeping your office or other work area warmer will be tax deductible. Just remember that if you take steps to keep the whole house more comfortable, say by installing a new furnace, you can only deduct part of the cost. For example, if your office takes up 5 percent of your home's square footage, you can deduct only 5 percent of what you pay for the new furnace.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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