Compare Microbusiness Energy Prices
A microbusiness is made up of ten employees or less. It may be a new business. A family ran the company or a private business that does not wish to expand. Either way, comparing microbusiness energy prices is essential as energy prices should be kept low to allow more revenue for development, so choosing the right energy tariff and minimising demand is essential. Furthermore, tracking your energy consumption is vital to identifying areas in which you can decrease costs.
Compare Microbusiness Energy Prices
What is Classified as a Microbusiness?
As aforementioned, a business is deemed a micro business when a maximum of ten employees are hired. Moreover, their electricity consumption is between 5,000 and 10,000 kWh per year. Thus approximately £1,500, and their gas consumption is 10,000 kWh averaging approximately £500.
Although these are rough figures and each supplier has a different idea of what a microbusinesses demands are, they are what, on average, an energy supplier company would deem one to be. It is essential to recognise the size of a business because this reflects on their energy demand; for example, smaller businesses use less energy to benefit from different tariffs than larger businesses. Unfortunately, tariffs are usually more expensive per unit because energy suppliers still need to profit. They usually only offer discounts to businesses that purchase more energy from them.
Compare Microbusiness Energy Prices – Energy Tariffs
Small businesses with low income are most commonly encouraged to use the fixed rate tariff. All energy suppliers offer this, whereby the unit rate (per kWh) is the same throughout the entire contract. For instance, if the electricity cost were 20.0p per kWh at the beginning of the contract, this would be the unit price for the remainder of the contract until its termination, usually one, two or three years.
The principal benefit of the fixed rate tariff is the price security; micro-businesses find this advantageous because you can easily estimate your energy costs if you use roughly the same amount each month. As the revenue and profits are still low when you start, you cannot afford to spend lots of money on simply maintaining the business, which is why the risks associated with variable tariff rates like an increase in energy prices can be detrimental.
On the other hand, some micro businesses have a higher revenue but do not employ as many workers or have a high energy demand. This includes family businesses or luxury companies with a small circle of clients, as even though they are hugely successful, they do not necessarily consume much electricity or gas. When this is the case, variable rate tariffs are introduced whereby the unit rate is not the same throughout and is instead subject to change, dependent on the market value.
These micro-businesses can benefit from the decrease in unit rate energy when the market value is low, decreasing their business energy costs. Alternatively, in the case of a spike in energy prices, they are informed at least one month in advance to prepare for the additional expenses.
How to Reduce Energy Costs
As microbusinesses are prone to higher energy rates and are still subject to 20% VAT like other businesses of a larger size, they look for methods that decrease their energy costs. Most importantly, micro-businesses with lower energy costs install a smart meter that measures the business’s energy consumption in real-time, allowing employees to visualise the amount of electricity they use and identify areas where they can cut back.
For example, the marketing manager may have an office with a faulty kettle, which can be replaced to maximise efficiency. In the same way, the manager may forget to switch the lights off after they leave the office, but with an intelligent meter, this can be recorded, and they can make a conscious effort to prevent this from happening again.
Another crucial step that microbusinesses with low energy prices take is replacing old appliances with newer, more efficient versions. For example, switching to LED lights can decrease lighting costs by over half, and there is no need to struggle with remembering to switch off the lights and decrease demand. It is a simple yet effective alternative. Similarly, obtaining a smart thermostat and removing the traditional one is wise because the business’s temperature can be maintained, and no energy is wasted on forgetting to lower the heating or overestimating how cold it is. These steps help to decrease energy costs.
Microbusiness Energy Prices – to Conclude
In conclusion, microbusinesses are classified by their energy consumption and find similar tariffs beneficial, allowing them to search for the right deals. Even though they have lower consumption than bigger businesses, they are subject to higher rates; therefore, measures should reduce costs.
Find out more about switching business energy providers here.
Other useful links about Business Energy
Crown Gas and Power
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