Tuesday, 1 November 2011

How SMEs can protect themselves from increasing energy costs

Making more money out of your business isn’t just about increasing sales. Taking control of your overheads can make a big difference to your profit margins too. After all, a pound saved is far more important than a pound earned because it goes straight to your bottom line. And with price increases for businesses of as much as 30% over the past 12 months, the cost of energy is one of the worst offenders for eating into profits.

Not for the first time this year have all the major suppliers announced that prices are going up again - by as much as 19% this time round for consumers. However, because businesses tend to pay for their energy on fixed price contracts lasting a year or more, the renewal quotes that we are currently seeing coming up are even higher. Rates suddenly doubling - eg from 8p/unit to 16p/unit for electricity - are not uncommon, often in cases where the business owners find themselves automatically locked-in to paying the new rates for another year before they’ve even realised what’s happened.

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