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Ofgem stats show 40% of SMEs haven't switched supplier in the past 5 years
Figures released by the regulator suggest that many small businesses aren't engaging with the energy market
Energy can be a difficult expense for businesses to cope with in the current climate, and the latest figures show that many SMEs may be enduring an unnecessarily tough time when it comes to their bills.
According to statistics released by Ofgem, 40% of SMEs have not switched their energy supplier in the past five years, suggesting that more than one third of small firms are paying over the odds for their gas and electricity.
The issue is that these businesses will be on retention, renewal or out of contract rates - the majority of which are more expensive than the acquisition tariffs that are available to those that switch.
With so many firms neglecting to sign up to a cheaper deal, just what is it that's standing in their way?
As Ofgem's research details, 25% of businesses say they haven't switched their supplier because they believe the process is too complex.
The more a firm neglects its energy contract, the higher the likelihood that it will be paying too much for its gas and electricity
It's a concerning figure - especially when you consider that the more a firm neglects its energy contract, the higher the likelihood that it will be paying too much for its gas and electricity.
With confusion clearly preventing a quarter of Britain's SMEs from taking definitive action on their bills, it's evident that more needs to be done to empower small businesses. But what is the answer?
One of the most notable statistics in the Ofgem report was that almost half (47%) of firms want the switching process to be quicker.
Similarly, 50% explained that they wanted shorter notice periods when it comes to informing their existing supplier that they've decided to switch to another provider.
Given that speed and ease clearly play a major role in a business's decision to properly address its bills, it's vital that measures are put in place to facilitate simpler switching.
Switch for a reason
While there are obvious barriers that small firms believe are preventing them from switching, the fact is that there are a range of reasons why they should do so - and the majority are down to money.
The statistics show that 69% of switchers were motivated by the offer of a tariff better suited to their needs, while 62% changed supplier in order to achieve a reduction in cost - even if their existing provider hadn't announced a price rise.
With finances playing such a decisive role in businesses taking the decision to switch, it's vital to properly support those firms that see the process as too complex to navigate. That's where we come in as an intermediary (we're constantly striving to improve the rate at which agreed contacts actually go live) - but full cooperation from energy suppliers is of paramount importance.
The more businesses show their desire to find cheaper deals, the more pressure will build on an industry that is already under scrutiny. If that happens, switching - and therefore saving money - will only get faster and easier.
Image credit: Alan Cleaver