One in five small businesses spend more than 10% of their annual turnover on energy bills, a survey by Electricity4Business has found.
The research, which canvassed the opinions of 1,000 small businesses in the UK, also found that a further 22% spend 5-10% of their yearly turnover on fuel bills. And as fuel prices continue to rocket, companies are increasingly likely to feel the pinch.
Wholesale energy prices have escalated by 22% since January 2008 and this increase is being fed back to customers in substantial price hikes. Electricity4Business now estimates that energy bills have become the second biggest cost for small businesses.
Part of the problem, it seems, is that businesses don’t understand either their obligations to their supplier or the energy bills themselves. Nearly 20% have no idea whether they are under contract or not and say they ‘just pay the bills’ and 32% do not understand the breakdown of their electricity bill.
Graham Paul, sales and marketing director at Electricity4Business said: “It is crucial that businesses understand the point at which their contract comes up for renewal so they can shop around and avoid being rolled over into an ‘evergreen’ contract at a higher unit price.”
Jonathon Elliott from comparison site MakeItCheaper agreed, urging companies to shop around for a better deal when their contract comes up for renewal. “By understanding their contract and benefiting from the support available from alternative suppliers and industry bodies, businesses can reduce the financial impact of high energy bills.”
© Crimson Business Ltd.
