If you own a microbusiness, you’ll probably be used to tight margins – which is why paying more than you need to on essentials like wages and utility bills is something you need to avoid.
The trouble is, an Ofgem investigation has found that the smallest businesses struggle to engage in the energy market, and so a series of regulatory reforms were put in place to protect micro businesses from ‘rip off’ energy prices. To find out more, take a look at Ofgem regulations for business energy contracts.
It's not all bad news though, as these reforms make it easier for micro business owners to switch energy supplier, offering more flexibility to switch compared to other small or medium sized business.
And comparing small business energy suppliers and switching to a new deal is the simplest way to significantly cut the cost of your overheads and avoid shelling out on big bills.
A microbusiness is broadly defined as one that has fewer than ten employees and turns over less than €2 million (around £1.7 million*), although definitions can vary.
The Office for National Statistics’ definition, for example, is slightly different from the EU’s definition, while HMRC often doesn’t distinguish micro businesses from other small businesses.
Things are a lot simpler when it comes to energy contracts though, as the only definition that matters is the one set out by Ofgem. The UK energy regulator states that, to be classed as a micro business, your enterprise must:
If you’re not sure how much energy you use, check out our guide to average business energy bills or get in touch with your current energy supplier.
If you think your business qualifies as a micro business, but your supplier doesn't agree, you'll need to send them any supporting evidence that you think qualifies your business under the conditions for a micro business.
If you run your business from home and about 50% of your energy use goes on powering your microbusiness, then you should consider swapping your household energy plan for a business one - commercial energy prices for gas and electricity tend to be lower than rates for domestic use, though this can be offset by higher rates of VAT on business energy.
When you work out how much of your household energy your business uses, bear in mind that you can’t include the cost of running appliances that are always switched on – such as your fridge or freezer.
To get the best electricity prices for micro business energy users, pop your postcode and business name in our business energy comparison tool, and one of our team will give you call back to help you find the best deal.
As a microbusiness owner, you can tell your energy supplier that you want to switch at any point during your agreement. SMEs, on the other hand have to wait for a set notice period before telling suppliers that they’d like to change contract.
Rules brought in by Ofgem back in 2014, mean that if you’re on a fixed-term contract, energy providers must clearly show when your contract begins and ends, along with any notice periods – making it easier to see exactly when you should switch to avoid rolling over to pricy default energy plans.
If you’re worried about relying on estimated meter readings and eventually being hit with a huge energy bill, then you can relax. Ofgem, has also set out guidelines that mean energy suppliers can’t backdate bills more than 12 months. Of course – to avoid under or overpaying, you should always provide accurate readings so you only pay for what you use.
Switching your business energy provider is simple, quick, and hassle-free, just fill in your details for a quote or give our UK based experts a call on 0800 326 5517.
To find the best deal for you, we’ll listen to your business needs then search for quotes from all the top energy suppliers. Once we've foudn a deal you're happy with, we'll take care of the rest, inclduing telling your old supplier you're leaving and setting you up with your brand new one.
We’ve helped small businesses save as much as £2,144** a year on energy bills – so if you want to increase profit by reducing costs, contact us today and see how much you could save.
* Based on exchange rate as of 22 May 2018
** *At least 10% of UKPower business customers who made a saving on their business electricity and gas contracts between August 2018 and August 2019, saved on average £2,144.