Statistics show that as many as one million small businesses don't know how much they're paying for their energy, leaving them exposed to sky high prices. Is your business one of them?
Britain's small and medium-sized businesses are the lifeblood of our economy – but a massive proportion of them are throwing money down the drain by paying too much for their energy bills.
According to statistics, around 20 percent of businesses don't know what they're paying for their gas and electricity. That’s about 1 million businesses that are in the dark about whether they pay good rates or bad rates - and if they don't know, they're probably paying bad rates. This is because energy suppliers’ best prices are reserved for people who engage with the market.
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Perhaps even more alarmingly, a whopping half a million businesses are paying nearly twice the standard rate for energy because they’ve been placed on ‘deemed’ rates by their supplier. They go onto these rates when they’re starting up or moving into new premises – in other words, at exactly the time when they’re most vulnerable financially and need to be keeping their costs as low as possible.
On the other hand, proactive businesses who do take action tend to pay around 30% less than a business on a standard rate, which amounts to around 65% less than those on deemed rates. When they're spending thousands on gas and electricity every year, this makes a huge difference to their profits. Here's a quick breakdown of the difference between deemed rates and those available to businesses switching to a new contract:
Clearly, if you're a business that switches, you're stealing a march on a competitor that doesn't.
The truth is that energy suppliers actively expect the vast majority of customers to remain inert and, not unreasonably, base their forecasts on that assumption.
Although the industry regulator Ofgem has forced energy suppliers to make key information like contract end dates more visible on bills, it’s fair to say suppliers are still not still not knocking any doors down to offer their customers their best deals.
Almost inevitably, this means hard-earned money that Britain’s SMEs could be keeping for themselves is instead boosting the gargantuan profits of the multinational companies we pay to supply our gas and electricity.
The good news? The very businesses in question have the power to do something about it and boost their own profits with almost immediate effect – and stop being one of the ones that allows costs to spiral out of control unnecessarily.
To ensure you're getting a fair deal for your business electricity and gas, call 0800 068 5222 or see more from Make It Cheaper.
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