By Marcus Leach
Nearly half (44%) of UK medium-sized businesses (MSBs) do not believe current energy products meet their needs, yet energy is ranked as the second highest risk they face, according to new research from energy supplier, npower.
The research found that medium-sized businesses believe energy to be a greater risk to their business than cash flow, legislation and security, with only sales ranking higher.
Over 90% of those surveyed want tools to help them take control of their energy buying, as time and resource is their number one barrier to more sophisticated purchasing. As a result, npower is launching two industry-first propositions for MSBs to help them take control of their energy procurement and better manage their budget.
Direct Budget Management (DBM) is a middle-ground between fixed and flexible energy contracts that enables MSBs to take greater control over their energy purchasing. npower will track the market on a customer’s behalf and buy their energy in line with an agreed strategy — ensuring complete budget certainty for a business.
PriceWatch has been designed for customers who currently purchase energy at a fixed price but want greater flexibility and control over energy purchasing decisions by renewing their supply contract at the best price point. This puts businesses in greater control of their budget, enabling them to make a purchasing decision based on cost, instead of renewing on a fixed date which could coincide with a peak in price.
“Our research shows there is a lack of products specifically for medium-sized businesses - so we are addressing this by being the first energy supplier to market with propositions directly targeted at this sector," Jon Davies, head of product management and strategy, npower, commented.
"A key driver of ours is empowering businesses to take better control of their own energy purchasing by retaining budget certainty whilst making more informed buying decisions. Both products do this by helping to move the emphasis away from time-led to price-led energy purchasing.”
npower’s research follows the CBI’s recent ‘Future Champions’ report which encourages larger companies to offer more support to medium-sized businesses. To build up the capabilities of those medium-sized businesses that have very low or declining growth rates, the CBI proposes that it and the Government encourage larger firms to support them in their supply chain, in order to share best practice and increase levels of leadership, innovation, exports, recruitment and financing.
“Medium-sized businesses are truly a forgotten army, and now is the time to unlock their potential," Emma Wild, CBI head of Future Champions, said.
"We should be championing, nurturing and encouraging our medium-sized firms so that more of them grow and create jobs. These companies could inject tens of billions of pounds into our economy.”
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