Failing to switch energy providers is hitting small businesses

A failure to switch to cheaper energy tariffs and suppliers is costing the UK’s small businesses vast sums of money, new research has revealed.

According to Love Energy Savings, not switching in the past five years has cost the UK’s SMEs in the region of £2.4 billion.

Around 30% of Britain’s 5.4 million businesses have not switched gas and electricity supplier in the same time period, meaning they are left with higher tariffs than necessary.

Some firms may have been able to save nearly £1,500 had they switched, yet only 47% of firms looked into switching provider or changing tariff during the last 12 months.

It means these small businesses could be missing out on savings of up to 40% on their main energy bills – finances that could be used elsewhere to boost sales or growth.

Love Energy Savings Managing Director Phil Foster suggests that firms are unaware of their options or that they may be finding the switching process difficult to understand.

He points to the need to ensure that all business owners are kept well informed about changes to the structures of energy tariffs.

Given that less than 50% of firms are considering a switch, he suggests that levels of awareness are not as high as they could be.

If a business owner believes their firm could make savings, or if they are unsure of their financial position, undertaking an independent business review is recommended.

By undertaking an unbiased review of assets, finances and forecasts, it’s usually possible to develop a strategy that can ensure a financially secure future.

Of course businesses can take a proactive approach to cutting their energy bills too, by taking simple steps such as turning off lighting, not leaving equipment on standby or by turning down the thermostat by a degree.

This should limit energy usage which can decrease bills and which potentially could leave more finances for growth and expansion.

By Phil Smith

If you would like to have a free no obligation chat with one of our advisers please call us on 020 7186 1144.

View all Business Insights