Vast majority of SMEs are overcharged for their energy
Small businesses across the UK are being overcharged for their energy, a factor that is helping to push operational costs to unmanageable levels.
According to Love Energy Savings, 80% of Britain’s small businesses are paying more than they need to, while it is also suggested that the Big Six energy providers charge SMEs more than larger businesses.
As a result, SMEs are being urged to consider their options and to see if switching supplier could provide a better deal – despite overpaying, four in five business are yet to switch.
The energy analyst revealed that many firms are automatically rolled over onto more expensive tariffs and that many companies fail to realise.
The so called Big Six – British Gas, E.On, Scottish Power, npower, EDF Energy and SSE – have all announced tariff increases while industry analysts have warned of further rises in the winter.
Given that operational costs are among the highest outlays for small firms, taking action to reduce bills could help to remove pressure on finances.
Love Energy Savings Managing Director Phil Foster claims that “enough is enough” and called on small firms to consider what is best for them.
“It’s more important than ever that business review their energy costs to ensure they are on a contract that is working for them,” he explained.
The situation for small businesses echoes the household market, where seven in ten households are overpaying, despite three million having already switched.
For those operating on tight margins, many can ill-afford to be overpaying and the risk of insolvency lingers over those experiencing difficulties.
When late payments from suppliers and customers are added into the mix, the number of small businesses facing cash flow trouble and uncertainty increases further.
Those unsure of their options should seek corporate advisory services to find solutions that work for them – refinancing or restructuring are among the handful of options that could be available.
Love Energy Savings suggest that further price rises are inevitable and the analysts warn that a failure to act and find the best tariffs will ultimately hit a business’ bottom line.
By Phil Smith