Procurement 21 August 2018

5 signs your micro business needs to switch energy suppliers

Like the stock market, business energy rates go up and down

In today’s competitive energy market, it pays to compare business energy prices. A growing number of energy suppliers in the UK means a wide range of business energy prices and packages.

Did you know? Suppliers are making around £500m in excess profits due to UK businesses overpaying on utility bills.

By shopping the market and taking the time to compare business energy quotes, your organisation can save up to 40% on business energy tariffs.

Energy experts at Smarter Business, one of the UK’s leading independent consultancies, have flagged five signs that it’s time for you to compare your company’s energy prices:

  1. Your existing contract is coming to an end

It’s important to stay on top of your energy contract so that you know when you can switch suppliers and save. When your contract is about to end, your supplier will give you a window period in which to find a new deal. If you miss it, you may be put on higher rates by default once your contract expires.

Top tip: You can be placed into a new contract 120 days before the end of your current one. Bear in mind that it can take 28 days to process a switch, so don’t leave it until the last minute.

  1. You are on a deemed contract

If your current contract has already expired, you will have been moved onto a deemed contract with expensive out of contract tariffs.

Avoid paying more than you need to: A survey by the CMS revealed that about 40% of businesses in the UK have never switched energy suppliers. This translates to a large number of organisations that are missing out on potential energy savings and paying more than they need to.

  1. Your options are limited

Your energy supplier may recommend a deal without showing you all the available options, which means that you could be missing out on a more suitable tariff. Your supplier should help you compare the different tariffs they have available and choose what’s best for your business.

In addition, one supplier can only offer a limited number of packages and pricing. If you use a broker, on the other hand, they can offer you up to 21 prices based on your needs.

  1. You signed up when energy rates were high

Like the stock market, business energy rates go up and down. If you signed up for a new contract when gas and electricity rates were high, you’ll be stuck paying these tariffs for the duration of your contract. As part of our energy procurement service, Smarter Business can monitor the market on your behalf, helping you procure a new contract when rates are more favourable.

  1. Your supplier hasn’t taken your unique circumstances into account

Every business has its own unique energy context and requirements. Here are some of the variables that factor into the price you pay:

  • Some organisations qualify for reduced VAT amounts
  • Regional variations
  • Using the same supplier for gas and electricity
  • Type and size of your business

Businesses that use more energy may also be able to negotiate better terms with their supplier. In the case of Essex County Laundry (an energy-intensive commercial laundry service), Smarter Business managed to secure notable savings by ensuring they were on the contract best-suited to their needs.

“Smarter Business’s expertise in managing and tendering contracts enabled us to enter into a new arrangement that gave us access to the wholesale market, which resulted in significant savings of around £900 000 between 2014 and 2017,” says Essex County Laundry managing sirector, James Lincoln.

Leave it to the business experts

Time is a valuable resource for small business owners and, whilst savings are attractive, the process of acquiring and comparing electricity quotes is confusing or time-consuming. Using an independent consultancy to help you switch can save both time and money.

With a broker’s level of expertise; strength of supplier relationships; leading-edge technology; and range of fixed, flexible, and bespoke products, they will likely be able to source the most competitive energy pricing for your business.

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