After employment and transport, the biggest fixed overhead for businesses is energy, at an average of 10% of the overall cost base. As a much-kicked political football, everyone knows this is a cost that's been heading one-way for a long time now. It also looks certain to remain one of the most volatile with our over-reliance on imported gas and the latest prediction that hitting our renewable targets will push the pass-along cost of business electricity up by another 34% by 2020.
So, you would have thought that switching between suppliers in search of better a deal would be a popular past-time for business owners? Particularly when you consider that switching can easily shave a third off bills and that there's a wide choice of suppliers geared-up to supply small businesses. As well as the big six providers (British Gas, EDF, E.ON, Npower, Scottish Power Business and Scottish and Southern) there's: Opus, Haven, Total, CNG, Gazprom, Corona and Dual Energy. They're all eager to sign up new businesses with attractive acquisition rates and packages for small firms.
However, business switchers are a rare breed with as few as 7% managing to stay in control of their contracts by regularly moving between suppliers and tapping into the lower rates on offer - half that of the household market.
The main reason for this is that only half of businesses know that if you want to terminate an energy contract, you need to do it within a 'renewal window'. Only one in five are actually aware of receiving the all-important contract renewal letter that tells them when the window is open.
This elusive window, which comes into range somewhere between 120 and 60 days before the contract end date, may only remain open for 30 days. It is only during this period that you can apply to switch or look to negotiate a better deal with your existing supplier. Unsurprisingly most miss the deadline, looking at their bills only once the contract end date is reached - by which time they've already been assumptively 'rolled over' for another year on unfavourable rates.
We're lobbying for changes to the renewal process that will ultimately make it easier for businesses to switch. But, until those changes take place, it's well worth checking when your window opens so that you stay in charge of who supplies you ... and at what price.
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Find how much you can save off your energy and other utility bills. Call Make It CHeaper for a free consultation - it take minutes but could save your business thousands. Click here for more information.