Small Business Energy
Being a small business in a world full of large commercials can be tough, as you’re constantly trying to get enough feet through the door, while also balancing the books. A big part of that balancing is ensuring that your energy cost isn’t crippling your profits. As an energy broker, we’re perfectly placed to break down some of the jargon you’ll come across and ensure you’re well place to ensure you aren’t being overcharged on your energy bills.
How can I find the right energy provider for my small business?
To find the right business energy provider you should consider the following:
Pricing: Compare the prices of different energy providers to find the best deal. You can use an energy comparison service or broker like ourselves to help you find the deal that is best suited to your small business.
Reviews: You should look for brokers or providers who have a good track record of providing excellent customer service. Here at Exchange Utility, our friendly team of energy experts are here to connect you with the right suppliers who are best suited to your business. Due to our understanding of the energy market we are able to find the best suppliers, who will provide a good level of customer service.
Choice of tariffs: Choose an energy provider which offers a range of tariffs that suit your business needs. We will always suggest a supplier that we feel are best suited to your business, based on location, size and industry type. But we will always let you select the supplier that is right for you.
Eco-friendliness: A priority for a lot of companies is ensuring they are being environmentally friendly, and finding an energy provider that offers renewable tariffs will help reduce your company’s carbon footprint.
Exchange Utility provides expert advice for switching business energy providers that allow you to manage your business while we look after your energy switch.
How does energy pricing work for small businesses?
This is all dependent on which energy supplier you decide is best for your business. There are a few general types of pricing available for small businesses, including:
Wholesale Energy Prices: The wholesale price of energy refers to the price which energy providers will buy energy from generators, which can often fluctuate depending on a number of factors. Those factors include, weather, international conflicts as well as supply and demand.
Retail Energy Prices: The retail energy price is the cost of energy for customers charged by the provider, a price which is usually higher than wholesale prices. The cost is more due to the distribution, customer service and running of the energy provider.
Tariffs: The way in which energy is priced is known as a tariff, charging a fixed tariff means the cost per unit of energy is fixed, whereas variable tariffs will see the price shift up or down.
What is classed as a small business?
The UK government defines a small business as one with under 50 employees and an annual turnover that is beneath £10 million. According to the UK government website, meeting two of any of the following three criteria will see you defined as a small business:
- A turnover of £10.2 million or less
- £5.1 million or less on its balance sheet
- 50 employees or fewer
How much energy do small businesses use?
The amount of energy a small business uses varies dramatically depending on the size, type and location of the small business. According to the UK government the average business will use around 5,000 kWh of electricity and 10,000 kWh of gas per year.
You will be classed as a small business by energy suppliers should your energy usage be below the above figures.
What types of small business energy contracts are available?
Fixed-price tariffs: These tariffs offer a fixed price per unit of energy for a fixed period of time, which can be anything from one to five years. This is ideal if you’re worried about rising energy costs.
Variable-price tariffs: The price per unit of energy varies based on a number of different factors that can affect the wholesale price of energy. It is slightly riskier to opt for a variable price as your monthly spend may increase, though it can also decrease.
Dual-fuel tariffs: These tariffs offer both electricity and gas from the same provider, a convenient option if you’re looking to consolidate your bills.
No standing charge tariff: A standing charge is a fixed daily cost which is paid by you to your energy supplier. Having no standing charges on your energy bills means that you will not pay the standing charge fee. This is a few which maintains the network including materials and maintenance work. Due to not paying a standing charge fee, the likelihood is you will have to pay more for your standard tariff.
Quick tips on saving on energy bills as a small business:
- Switching energy providers regularly: Energy will often fluctuate over time, so it is important to switch energy providers regularly to ensure you’re getting the best deal.
- Choose the right tariff: There are a number of different energy tariffs available, so it’s important to choose one that suits your business needs. For example, if you have a predictable energy usage, you may want to choose a fixed-price tariff.
- Make your business more energy efficient: There are a number of ways to make sure your business is more energy efficient. Installing energy-efficient lighting and insulation will help you save money on your energy bills throughout the year.
- Take advantage of government schemes: There are a number of government schemes available to help small businesses save money on their energy bills, You can see a few of these schemes below.
You can take a look at our guide on how to be more energy efficient at work for extra tips that will help you make the most of your budget.
Can my small business get help with energy bills?
There are a number of schemes that are available for small businesses to help them with their energy bills, including the following:
- Energy Bill Discount Scheme: This scheme offers a discount on electricity bills to eligible businesses.
- Business Energy Efficiency Grants: These grants can be used to help businesses invest in energy efficiency measures, such as installing energy efficient lighting and insulation.
- Hardship Funds: Some energy providers will offer a hardship fund that will help businesses whoa re struggling with paying their energy bills.
Small business energy FAQs:
Is my business eligible for government help?
To check if your business is eligible for the Energy Bill Discount Scheme, you can use the government’s eligibility checker.
What is I run my business from home?
If you run your business from home you may be able to get help with your business energy through the Domestic Support Scheme.
What if I can’t pay my business energy bills?
If you are struggling to pay your business energy bills you should contact your energy provider as soon as possible, as they may be able to offer you a payment plan or other assistance.
Is my business a microbusiness or an SME?
Before we get started on which energy provider is the right one for your business, we need to see if you’re classed as a microbusiness or an SME.
Microbusinesses are the smallest type of business in the UK and you’re only considered to be one if you have a maximum or 9 employees.
What is the difference between an SME and a micro business?
The difference between a small business and a micro business is that a microbusiness only has a maximum of nine employees as we have just mentioned, whereas an SME can have anything under 250 as well as having an annual turnover of less than £25 million. A sizeable difference!
How many small businesses are there in the UK?
In 2022 there were 5.47 million small businesses in the UK (0-49 employees) accounting for 99.2% of the total amount of businesses in the UK. This data can be found here on the government website. In comparison to SME’s and large businesses there are a signficantly bigger number of small businesses. There are a total of 35,900 medium-sized businesses (0 to 249 employees) and 7,700 large businesses (250 or more employees).
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