Procurement · 3 July 2017

Micro business owners reveal the hidden energy costs crippling their cash flow

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Almost half of respondents had experienced a sudden and unexpected bill for a large upfront payment
Over half of UK micro company foundersbelieve rising utility bills are crippling? the future of their business, according to new research uncoveringa numberof worryinghidden energy costs.

The study, by challenger energy supplier Utilita ahead of Independent Retailer Month, suggestedover seven in ten micro company owners hadbeen caught out by unexpected terms and conditions in their supplier contracts, such as inflexible payment terms, contract extensions and high deposit rates.

Respondents used the survey to highlight potentially unfair treatment by mainstream energy providers. Almost half had been hit with a bill for a large upfront payment, while 42 per cent believed they had received a poor deal from the supplier due to the size of their business.

Meanwhile, 31 per cent believed they were on a high tariff because they were considered a credit risk. A fifth had been turned down completely by an energy supplier.

Most concerning was the reality of missing a payment. Some seven per cent had been completely cut off for failing to keep up with bills.

Commenting on the hidden energy costs faced by micro firms, Shaun Underwood, director of Utilita Business Energy, said: It is clear that there are a significant and growing number of small businesses that appear to be treated unfairly and have very real concerns.

customers should not be asked to pay crippling upfront deposits when cash flow is a problem, should not be put onto discriminative contract rates and should not be punished or shunned by suppliers. We faced these very same issues in the early days so we really do understand.

Responding to the study, Clare Bailey, an independent retail expert and high street campaigner, said micro firms were a crucial contributor to the economy and needed support to hold suppliers to account.

a secure, affordable energy supply is vital for these businesses it literally keeps the lights on? and the business operating, she said.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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