Fixed costs can help long-term planning

A quarter of businesses not implementing energy efficiency measures, report claims

• Using fixed energy tariffs can help small businesses to plan further ahead with confidence, according to energy supplier Npower.

PAYING closer attention to energy costs could help more small businesses plan ahead, according to one of the country’s major energy suppliers.

Research commissioned by energy provider Npower, which quizzed more than 500 small business owners across the UK on their business and energy planning, revealed a significant number of SMEs (small and medium enterprises) are finding it difficult to plan ahead because of the tough economic climate.
The study claimed more than half (57%) of small businesses are currently only planning six-to-twelve months ahead, despite recognising the benefits of having longer-term plans in place.
More than half of respondents (56%) said they take a ‘planned approach’ to energy use, but a quarter of businesses admitted to not implementing any form of energy efficiency measures.
Phil Scholes, SME markets director at Npower, said the research was commissioned to help the company better understand the various challenges facing the country’s small businesses.
“While the stability of the economy, which many SMEs cite as a key barrier to forward planning, is not something businesses can control, there are some steps they can take to help,” he said.
“For example, businesses may look to fix the cost of overheads where they can, such as choosing a fixed energy tariff, to help provide the certainty and confidence to plan ahead.”
Energy efficiency was already being embraced by some businesses, with 43% claiming to have examined the market and changed energy suppliers at least twice; 41% of respondents said they consider energy efficiency as a key business priority.

Many companies are not taking advantage of the energy solutions on offer.

“The energy picture formed by the SMEs’ responses demonstrates that, while some companies have embraced a strategy to minimise energy cost risk, as well as undertaking measures to reduce energy consumption levels and cost, many others are still not taking advantage of the solutions on offer,” added Scholes.
“Addressing energy costs by switching suppliers, fixing price and embracing energy efficiency, will improve the bottom line and help small businesses plan confidently for the future.”

• 57%of UK SMEs are only planning for the next 6-12 months
• 42% of business owners said the day-to-day running of their SME prevents them from making long-term plans
• 60% of small businesses owners said being able to fix prices, such as energy costs, would help them plan further ahead

Image – Using fixed energy tariffs can help small businesses to plan further ahead with confidence, according to energy supplier Npower.