SMES in the dark on energy expenditure
Small business owners may be concerned about the price of utilities, but more than half (52 per cent) of SMEs – 2.54m businesses – do not know what they spend on electricity, gas and water as a percentage of their overheads.
The study, published by the energy and water consultancy, Utilitywise, shows that only one quarter of small business leaders can easily see how much electricity, gas and water their business is using and less than a third are able to access energy consumption information.
The research highlights two thirds of small business owners delegate utilities purchasing and management to other staff, including their office manager. 17 per cent of respondents reported that they look after utility suppliers themselves, yet, more than one in ten small business leaders admit they do not know who in their business is responsible for this important overhead. This is despite the rising price of utilities remaining the main source of cost inflation for over half of all small businesses.
When it comes to energy purchase and consumption the data shows a lack of understanding and engagement amongst small business owners:
• business owners review their personal domestic utilities provision more regularly than they review the supply to their business (30 per cent versus 20 per cent, respectively);
• 14 per cent of small business owners never actively review their utilities provision which equates to 684,469 businesses across the UK that have never considered how they might get a better deal on gas, electricity or water;
• when compared to other products and services such as broadband, recruitment agencies and stationery, utilities has the highest percentage of small businesses that report they ‘never review their provision’; and
• 68 per cent did not know the difference between a fixed and flexible energy contract
Commenting on the findings Utilitywise’s Michael Dent said: “Our study shows there is a lot of confusion about utilities among small businesses. Misinformation and misunderstanding mean small businesses are suffering because they don’t know how to navigate the utilities markets nor have the consumption necessary to act for themselves. Poor buying and management of utilities stops growth and damages businesses’ bottom lines.
“To tackle this, we have introduced the Utilitywise Energy Alliance, a new service that uses the collective buying power of thousands of small businesses to get the same competitive energy deals as larger companies.”
By grouping small businesses together, the Utilitywise Energy Alliance gives SMEs the simplicity of a fixed energy price with all the advantages of buying energy flexibly on the wholesale market. Business owners are made aware of the budget price before they sign up, but the trading is done by an experienced team. This means customers will not pay more than the budget price, but may pay less as the budget price is flexed down each year to reflect the buying gains of the business.
