We operate in an era of unpredictability; the business environment is characterised by uncertainty more than anytime in living memory.
In this world of constant change, the greatest danger is that businesses stall and growth comes to a standstill. If anything can put the brakes on a company’s profitability and growth it is unforeseen costs, for example a rise in energy prices.
There have been plenty of stories in the press recently revealing the duplicitous behaviour of major energy suppliers. Last month, when news broke that independent supplier GB Energy was passing on a 30 per cent price increase to its customers, due to rising wholesale energy prices, it was a worrying sign for growth businesses.
Pulling in high customer numbers with unbelievable deals and then passing on the costs when wholesale prices rise and supplies become less reliable, can seriously impact the customer, particularly small business owners. As energy prices rise consumers struggle to keep up with their bills and it can have a damaging effect on cash flow and profitability.
Further news this month that the Big Six have potentially been obscuring profit margins from consumers only adds to the picture that the energy markets are not working in our best interest as business owners.
The bad news is that the commercial energy supply market is completely unregulated so actions that lead to serious price hikes are all too commonplace. The reason that the market remains unregulated is that Ofgem believe businesses are able to manage their own energy bills. Whether this is right or wrong there is little indication that the situation will be changing any time soon.
With this in mind the responsibility to protect themselves falls to the business owners. Understandably, business owners are far more focused on providing the best service possible for their customers rather than thinking about how much money they spend monthly on gas and electricity. However, this is a mistake, every business should have a hold over how they buy their energy, where they buy it from and how much they consume on a regular basis.
Keeping such a close eye on energy expenditure can be a time consuming and arduous task, but it has to be a top priority. One of the most important things to me about Yü Energy is that we provide a service for our customers that meets their individual needs, my customers are able to set their own payment dates ensuring that all the bills fit into their business’ cash flow plans.
There are a number of other things you can do to protect energy expenditure including reviewing your contract. Pull it out every so often and scrutinise the detail, when does it come to an end? What happens when your current tariff agreement comes to an end? Approximately 40% of SMEs haven’t thought about switching, often staying on over-priced tariffs. There is plenty of choice out there with sustainable deals that will benefit your business in the long run.
Most importantly don’t be sucked in by flashy deals that seem to be good to be true, they probably are. Research is key, look for a supplier that will provide a consistent, reliable service and look for reviews from other businesses that are similar to yours. Energy is one of the largest expenses that a business has so it’s vital that you have control over your spending and feel confident with the service your supplier is giving you.
By Bobby Kalar, founder and CEO, Yü Energy