How to Tackle Rising Energy Costs

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How to Tackle Rising Energy Costs

Many small businesses believe rising energy costs will be their biggest issue in the upcoming years. This comes ahead of Brexit, supply-chain disruption, and the ongoing effects of COVID-19. Over half of UK SMEs see soaring utility bills as a major challenge, according to the Federation of Small Businesses (FSB), which poses a major threat to many firms.

Families will also be faced with the issue of rising costs. Wholesale energy costs are rising significantly, resulting in suppliers increasing their charges by 50% or more. Unfortunately, business customers have none of the protections available to households, such as energy price caps. Larger businesses may be able to negotiate better deals, however, small businesses may have less leverage.

But it’s not all bad news. Many businesses will be on one-, two-, or three-year fixed-price contracts with energy companies. Price rises will only come into effect when these contracts have ended, and firms need to negotiate a new deal. Those fortunate enough may not need to pay higher bills for a while.

Effective Tips to Lower Your Energy Bills

When firms are looking to negotiate a new energy contract, it may be difficult to avoid higher prices. It’s always worth shopping around for the best deal and not automatically staying with your current supplier. However, prices are increasing across the whole market.

So, you may be wondering what small businesses can do? FSB is now pushing the government to provide support, but in the meantime, the best solution lies in reducing energy consumption. Experts believe many businesses can considerably reduce energy usage.

It’s possible to use less energy with a few easy steps, such as not leaving office equipment on standby and turning the lights off out of hours.

Now may be the perfect time to think about how your business operates on a more fundamental level. It could be worth considering whether anyone can work from home, as this would reduce the need for large and expensive business premises. Another option would be installing more energy-efficient equipment. Many energy companies offer grants so investments such as this are cheaper.

It's a great idea to double-check you are only paying for the energy you are actually using. It is important to regularly check meter readings and ensure they are in line with what the provider is looking to charge.

If your business begins to struggle, make sure to take action quickly. Speak to your provider about any difficulties as soon as they arise, as they may be able to offer you a payment plan. In some cases, business hardship funds may even be available.

Ignoring the problem will often worsen the situation. Late payments may result in penalty charges or added interest. If your supply gets disconnected, you will have to pay extra fees to turn it back on.

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