Best Practices for Setting Up Your New Business’s Utilities
Opening a new business (or expanding your current one to a new location) is exciting, but it can take a lot of work to line up all the details. This is especially true when it comes to utilities.
Navigating the landscape of choices for energy, water, internet and waste management providers can be time-consuming and confusing. This article will help you quickly and easily choose providers that offer the best prices and services, so your business can run cheaply and efficiently.
How Can I Save Money on My Utility Bills?
Check to see if you’re on the cheapest product tariff available for each utility. It only takes 10 minutes of your time, and you could save in a big way.
We’ve all seen the TV programmes where we as consumers are encouraged to switch utilities for our homes time and again, but business owners seem not to take the same advice.
For example, more people now switch their energy provider than at any time since deregulation in 1998. In fact, over 5 million households switched in 2017 and saved an average £325 per year. What are the utilities that have the biggest impact on your bottom line?
• Electricity and gas. Most businesses use more gas and electricity than a typical home, so the savings from using the best supplier are usually higher than those outlined above. And like a residential customer, if you haven’t switched in the past 12 months, you could save 40-50% on what you’re currently paying.
• Water and waste. The water market is also now deregulated for all businesses in England and Wales. Although the savings are currently small, you have the opportunity to select the supplier for your water and waste services. If you operate more than one site in different regions of the country, consolidate your suppliers so you just receive one bill from one company.
• Telecommunications. You can select your provider for mobile, landline and broadband phone calls. This can add up to substantial savings depending on the activity of your business. For example, some call plans have extremely low rates for international calls where others charge standard fees.
What Should I Do to Maximise My Savings?
The same advice presented for your private utilities applies to your business, with additional services available for this sector to provide more choice and cost savings.
One of the best places to start is with an online comparison site. The energy sector has plenty of choices. The services offered by the traditional websites such as Moneysupermarket.com are complemented by specialist services from the likes of BusinessEnergy.com and BusinessElectricityPrices.org.uk that only deal with business gas and electricity but take in the entire market.
The water industry is still finding its feet. Until they lower the wholesale pricing strategy, so it’s probably not worth your time at the moment.
For telecoms, it’s a little trickier to search the whole market space. Uswitch does a reasonable job but excludes certain suppliers such as PlusNet. It’s an excellent place to start your research, but be mindful that you may not find the very best deal.
What Are the Alternatives to Comparison Sites?
There are two alternative methods you can use.
1) Search all the providers yourself and get quotes from each one. That’s going to take a lot of your time, and you may not find some of the smaller companies that offer the best deals.
2) Find yourself a good broker that has access to all providers. They also have in-depth knowledge of their particular industry so will know which supplier is best for your circumstances. Whether you need reliable mobile coverage in a specific area, have a credit problem with your energy supplier or want to consolidate your water billing, they’ll know what to do.
Finding brokers that will work for you and not for themselves can appear to be a daunting process, so here are some pointers in selecting a company:
1) Find a company from a recommendation from a colleague.
2) Visit the industry associations’ websites and choose someone local.
3) Check the reviews online to see what other businesses recommend.
When calling a broker, ask if they are looking at the whole market. That way, you’ll know that they’ll present all available deals to you.
What Potential Pitfalls are There?
Check if you have any exit penalties. For example, usually gas and electricity contracts are difficult or impossible to change during a contract term. You’ll need to wait until the end of the existing agreement before you can switch to an alternative provider.
If you have exit penalties, you may still save money by paying the fee and moving to another supplier. Calculate the estimated savings with any penalties deducted to see if it’s worth switching mid-contract.
Cancelling a contract and not starting a new one can have negative financial consequences. If you’re out of contract with a supplier, you’ll be automatically put onto an emergency tariff so that your service remains live. Those rates are typically expensive and can be double what you’re already paying.
Jason Smith is a commercial energy expert who has spent over ten years helping businesses increase their energy efficiency. He manages BusinessElectricityPrices.org.uk which advises businesses on reducing their electricity rates and consumption.
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