Switching energy supplier: the simple way to keep your business overheads down

by Tim Deakin Business Energy News

Switching energy supplier: the simple way to keep your business overheads down

Choosing a different energy supplier could be key to improving your business’s overall performance

Ask any entrepreneur whether they’d like to spend less money, and chances are the answer will be yes.

Energy costs are a significant yet often overlooked factor in a company’s cash flow. In fact, research shows that the number of businesses shopping around to see if they have the best deal on gas and electricity is alarmingly low.

An independent study from Utilita found that less than half of businesses review their energy prices annually, and one in five only review them every 2–5 years. What’s more, one in 10 businesses never shop for a better energy deal at all!

So why is switching so important for businesses, and how can you reap the rewards?

How do business contracts work?

Understanding the nature of business energy contracts helps show exactly how switching can save you money.

These contracts are usually drawn up for somewhere between a 1 and a 5-year term. Like domestic agreements, they can be fixed or variable.

However, unlike domestic contracts, switching in the middle of a contract isn’t so easy when it comes to business. Providers tend to buy gas and electricity in bulk rather than on a monthly basis, meaning that by leaving in the middle of your agreement you’re leaving a lot of energy unused. This can mean being hit by unnecessary costs.

The ideal time to start shopping is during your ‘renewal window’. This is a period of time (between 1 and 6 months) before your contract ends.

How can you save by switching?

So why should you use your renewal window to find a better deal?

Well, first of all, you’ll avoid the price hikes that usually come as standard with a contract that’s been automatically rolled over. Many providers reserve their best deals for new customers, so the price promises they use to get you on board with them aren’t guaranteed to be repeated when you’re on your second contract. Instead, hunt around for better deals available to you. This may also encourage your current supplier to offer you better terms.

Switching can also help you avoid a ‘deemed contract’. These are tariffs that occur when no contract has been firmly established between you and your supplier. This may occur when you have moved into new premises and are using the existing supplier, or if your contract has been terminated but you’re continuing to use the energy.

These prices are, on average, 80% higher than rates from negotiated contracts, so needless to say they’re best avoided!

If you’re savvy, switching can also help you take advantage of changes in the business energy market. Simply choosing the right time to switch could result in better fixed prices for the duration of your contract. Staying up to date with industry news can help you strike while the iron’s hot, potentially saving you significant energy costs every year.

So why is it important to compare?

We’ve established just how important switching suppliers can be when it comes to lowering your energy costs and business spending, and yet Utilita report that 59% of small businesses in the UK don’t shop around for a better energy deal because they feel they don’t have time.

Thankfully, comparing prices and deals all in one place can make finding a better energy deal a smooth, speedy and rewarding experience. That’s where we come in.

Are you a small or micro-business on the hunt for a better energy deal? Let The Energy Check help. Our business comparison engine lets you compare deals and tariffs from across the industry in just seconds. So click here to start comparing today. For further help and advice, get in touch with our team on 0191 691 18 02!

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