Last updated on April 13th, 2015 at 02:10 pm

Getting the right energy prices is crucial for small businesses

Most small businesses face the same challenges and issues as the larger ones, but with fewer resources at their disposal they may be considered to have more disadvantages. Among the major issues usually identified by smaller companies are the satisfactory recruitment of suitably qualified workers; keeping up with technological advances; marketing costs; meeting statutory requirements; and gaining access to sufficient venture and growth capital.

Business overheads are another prime example: owners of commercial premises are now faced with utility bills that are higher than ever, whilst at the same time customers are unwilling to spend more and want bigger bargains and cheaper products.

Larger companies that are heavy users of energy may be able to get around this by negotiating good deals with suppliers – often they can do this because they have better financial backing and more buying power than smaller businesses. In these circumstances, smaller businesses with less financial support also need to be able to compare energy prices in order to find suppliers at lower prices if they are to remain sustainable, never mind benefit from any degree of growth.

Energy suppliers

Despite the high costs of energy today, there are many suppliers competing for business, and it is possible for small businesses to pick and choose the kind of deal that best suits the circumstances. There are also a number of things to look out for before signing a contract with a supplier, some of them obvious but some less so.

Energy suppliers use many different clauses in the contracts they offer – some allow price increases whenever this suits the supplier; some keep small businesses on board by matching the best offer elsewhere; however low energy prices do not mean the contract is being offered at the lowest cost – businesses may be charged more for additional facilities or other services.

Size matters; energy suppliers use different definitions of what constitutes a “micro” or “small” business so make no assumptions about eligibility and entitlements until a company’s exact meaning has been clarified.

Although small business energy use is more similar to domestic use than to large-scale commercial use, the same amount of protection is not available to small businesses as it is to private consumers. Not all energy companies follow best practice in terms of delivering fair and clear contracts, optimum customer service and accurately calculated bills. Therefore smaller companies need to remain vigilant in order to keep firm control of energy bills.

How to find the best deals

In terms of prices offered the length of contract often has a bearing on what constitutes a good deal. It is important to be clear therefore, that business consumers do not have the same legal benefit of a cooling off period as private customers following confirmation of a supply contract; therefore once a small business has agreed terms, it is committed.

As there are no price comparisons for business suppliers, small businesses are advised to do their own research to compare energy prices or use a trusted broker.

Further, as definitions of company size differ, shopping around for the suppliers that suit the actual company size can make a difference to the deal offered.