Running a small business can be hard. Add on all the utilities to manage, and it become that much more time consuming. Finding a great deal on your small business energy can be as easy or as hard as you make it. You just need to know where to look.
You’ll find some great exclusive small business electricity prices through comparison sites, and they’ll often take care of all the admin. This means you can carry on doing what you do best.
However, there are some tips and tricks you should know as a small business owner to get cheaper electricity prices. Here’s a useful guide that might help.
You may fall under a micro business. This is a good thing, as there are some unique benefits to being seen as a micro business.
Ofgem defines a Micro business consumer as a non-domestic consumer that meets one of the following definitions:
- Uses less than 100,000 kWh of electricity per year, or
- Uses less than 293,000 kWh of gas per year, or
- Employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million (approx: £1.8 million)
If you pay less than £12,000 per year for either electricity or gas you may be considered a micro business.
Benefits of being a micro business
The majority of small businesses in the UK meet one or more of the criteria above ,and so may benefit from the following tips:
You can give your termination notice at any time during your contract
Unlike larger businesses, you don’t need to worry about renewal windows when looking for a new contract. The maximum notice period for terminating a micro-business contract is now just 30 days. If you feel liked your business energy prices are too high, you can switch suppliers at anytime.
Ofgem also states that:
“Suppliers must also clearly state the contract end date and notice period on bills and statements of account for micro business consumers on fixed term contracts.”
“Suppliers must take all reasonable steps to acknowledge termination notice within five working days of receipt.”
Your fixed term renewal letter has to include your current business energy prices, new prices and annual consumption
Historically business energy suppliers would send confusing and unclear renewals that made it difficult to understand your options.
This Ofgem rule is designed to make it as easy as possible to compare business energy suppliers. It’s always best to compare electricity prices online as you will often find a better deal.
With over 50 business energy suppliers now operating in the UK, it’s unlikely you’re on the best available tariff and now you can quickly compare and easily find out.
Ofgem’s Standards of Conduct (SOC) covers most, but not all, interactions with your supplier
Under Ofgem’s Standards of Conduct suppliers have to ensure they treat micro business consumers fairly with respect to billing, contracts and customer transfers.
‘SOC’ covers everything from fair small business energy prices, right through to accurate billing. This places much more power into the hands of small business owners so they can find the best deals on their gas and electricity.
However, Ofgem does not regulate back-billing
Ofgem defines back-bills as: “catch-up bills for historical charges and relate to periods further back than normal billing.”
Back-billing usually occurs when the supplier has estimated gas and electricity usage. Sometimes this leads to the estimated usage being lower than the actual amount used. Some business energy suppliers will pick up on this early but it can leave a small business with a surprise bill at the end of the contract.
Obviously, back-bills can significantly harm a businesses cash flow, especially if the issue goes back several years. That’s why most major suppliers now voluntarily limit the back-billing duration when they are at fault to one year.
However, the emphasis is on voluntary, which means they under no legal obligation to do so and not all suppliers follow this guideline.
So as a small business owner you should make sure and ask what a supplier’s back-billing policy is before switching.
How to get cheaper business energy deals
Small business electricity is an essential. However, being smart and looking for a better deal can free up a lot of cashflow that can be used in other areas of the business. It’s important to take your time to understand what electricity prices are being offered to your business. Sometime energy suppliers may initially offer a lower price per kWh but charge a higher standing charge. Understanding how your business uses energy, how you can reduce your usage and what tariff will your business benefit from the most is crucial. This information will help you make an informed decision on the best tariff and energy suppliers for your circumstances.