Why businesses don’t switch their energy supplier (but should)

Why businesses don’t switch their energy supplier (but should)

As a company specialising in supporting SMEs and driving down costs, Joseph Letras, head of corporate at Great Annual Savings Group (GAS), looks at why SMEs should shop around for the best deals when it comes to their utility suppliers.

Setting up and running a business needs courage, foresight and a great deal of cool, calm common sense.

So why does much of that seem to desert some bosses when it comes to keeping track of their costs?

Energy prices can be one of the most punishing burdens for a growing business, but many file this task away and trust they are more or less in a good position.

Competition Markets Authority (CMA) figures published in March show that SMEs have been paying a combined £280m per year too much for their energy and their reluctance to switch supplier is undoubtedly a contributing factor here.

Sticking with current suppliers is in many businesses’ nature, but in the energy market there is much to be gained by making a switch, not least improved cashflow.

There are a number of perceived barriers which stop people switching suppliers, all of which can easily be bypassed by using an industry expert such as GAS.

Below are some of the common barriers:  

1 – “My contract isn’t due for renewal for another 12-18 months.”

This doesn’t mean that companies can’t prepare a new contract to start straight after the current one has ended and take away the uncertainty of future pricing. By agreeing a price in advance, companies can forecast their future outgoings more accurately. GAS can approach the market, secure a fixed price early and in most cases, reduce the cost.

2 – “It’s a hassle and time consuming.”

There’s no doubt it’s a jungle out there; the energy market is vast and complex. However, there are tools that companies can use to simplify this process. Firstly, price comparison sites have become increasingly popular thanks to their ability to carry out high-level searches and their catchy advertising. But to get right into the detail and provide tailored solutions which fit the business perfectly, companies can use a Third Party Intermediary (TPI) to do all of the work. This allows more time for the important task of running their business. At GAS, the company’s dedicated account manager will then present a variety of options and possible savings.

3 – “I can’t afford an interruption to my supply.”

Supplies won’t be interrupted, full stop. Companies’ energy is supplied through the same infrastructure regardless of supplier, so there is no digging, piping or re-wiring required when switching supplier. What’s more, if the contract is arranged in advance there’s no need to even think about the issue as the contract will simply switch over.   

4 – “I’ve looked at the big six and there’s no opportunity to save.”

Companies that say this may well have overlooked a large proportion of the market. There are scores of suppliers in the UK, many of which offer cheaper contracts on more favourable terms than the big six. Expert Business Solutions Managers at GAS know these smaller suppliers’ deals in forensic detail, and often have business relationships with the people who work there too, meaning they can secure a better price than that found on a comparison website or the open market.

5 – “What about exit charges?”

Leaving certain contracts early can result in penalty charges. Customer-centric TPIs can guide companies through this process and ensure that the benefits of leaving outweigh any charges. A good TPI won’t just offer you a better price, it will give you the priceless: peace of mind.

For more information on how you can cut your business’ bills, visit www.greatannualsavings.com or call 0191 500 5610.