October 31, 2011

Ofgem Rules – OK?

Filed under: business energy — Tags: , , , — Newsroom @ 11:22 am

Whilst we all welcome the intervention of Ofgem, the energy regulator, and the fact that they have told the big six energy suppliers that they are under notice regarding their tariffs and charges, this probably doesn’t go far enough in their pursuit of the suppliers.

There needs to be the opportunity for new players who want to enter the market to be able to throw their hats in without fear of intimidation by the market leaders.  Every industry is better for having competition – this must lead to tighter pricing and better service for their customers.

The net profit for these largest energy providers has, according to Ofgem, increased from £15 in June 2011 to £125 in October 2011.  This means that over a short four month period the annual net profit for the big six suppliers has risen by an enormous 733 per cent.

There can’t be any other industry or business where over such a short period of time the prices would be increased on this scale.  The problem faced by Ofgem though, is that they can’t actually force the energy companies to comply with their requests.  This appears to be self-defeating, having organisations which are there solely to deal with difficult situations, but not having enough authority given to them so that they can insist on compliance, with serious consequences imposed on any individual companies which flout the rules.

The current situation is that the clocks have changed signalling that winter really is on its way, and no doubt the central heating will be working overtime within a few short weeks.  The number of families heading towards the fuel poverty calculation of 10 per cent in net income is rising every day, and no doubt before we reach spring many more thousands of families will add to the current figures.

Many small business owners are in a similar position, and need to spend more of their revenue on energy bills.  The large energy providers have said that they will consider making payment plans for those businesses struggling to pay their accounts, however this doesn’t solve the problem, it just spreads it out!

The best way to save money on gas and electricity is by contacting an individual energy broker who has the expertise to work out where savings can be made.  They can also arrange for an energy audit of premises.  There are energy efficient products and loft and cavity wall insulation and a broker will give suggestions regarding these.  They will be able to negotiate a really good deal with a new company at the end of an existing contract.

One major point to consider is that when helpful information is given, try to act on it – otherwise there won’t be any savings at all!

September 9, 2011

Going Up, Up…It’s Time For Change

Filed under: business energy — Tags: , , — Newsroom @ 10:08 am

In a week which has seen Eon increase its electricity prices to business customers yet again, you wonder how many more increases the beleaguered small business owners will be able to absorb before bursting.  Although this increase is less than 4% it represents an irritant which sees one or another of one of the six main energy providers adjusting their prices upwards every month.

The Regulator has already instructed a team of independent accountants to investigate into the way that the main energy providers conduct their business.  Although the results of their deliberations won’t be known for several months, surely the energy providers have realised that they have been put on notice.   They can’t continue to create difficulties for businesses throughout the UK without being brought to account.

In a world where business owners need to have all their wits about them in order to keep their businesses afloat, electricity and gas are basic necessities required by every company.  There has to be a way to provide heat and light, let alone power the myriad of electric appliances without which no company – or home – can manage.  Yes, we know of programmes where families manage without gas and electricity – however they require coal and other alternative energy sources.

It surely should be a given right to have basic necessities provided at an affordable figure.  We know that small companies and shops are closing at an alarming rate where thriving villages have been turned into nothing but ghost towns.  People can’t buy provisions, the village school has closed and the post office has disappeared.  Whilst these are, to a certain extent, caused by the huge supermarkets taking trade away from the independent retailers, another reason for these closures is in the high overheads being incurred in order to keep village shops and small businesses trading.

Small businesses want to make a profit – absolutely, but they are not wanting to be greedy.  What they want is to make enough of a profit to sustain their family.  Once any staff members have been paid and the running costs allocated, the business owner needs to be able to house, feed and clothe his family – and of course, pay his energy bills!

The provision of energy is a wonderful thing, and where would we be without it?  We are all aware of the cost implications in giving us clean, safe gas and electricity.  There is a huge mountain of costs and organisation necessary to bring gas into a small village where they have previously managed without it.  Yes, they have managed, but in a progressive society where everything evolves and moves forward (hopefully) they are entitled to receive the same facilities as other communities.

Instead of always thinking about profits, perhaps the big six energy providers should concentrate on being a service industry.  They want to survive so perhaps it’s time for them to provide a better service.

Any other business receiving as many complaints as they have, and still are receiving, couldn’t continue to remain in business – perhaps that’s something to consider.

September 7, 2011

Trust Your Staff – They Enjoy Responsibility

Filed under: business energy — Tags: , — Newsroom @ 12:27 pm

Some small business owners in the UK have recently been asked about their overheads, and to identify the most expensive bills each month.  Rent, unsurprisingly was at the top of the list, but whereas business rates would have been expected to be the next item, in many cases this isn’t the case.

The second most expensive cost every month is shown to be electricity and gas bills, followed by business rates and phones.  Once that piece of information was available, you would expect that the owners would want to do something to reduce these costs; however, the majority of users felt that there was nothing that they could do about it.  They effectively shrugged their shoulders and said that they were too busy to worry about it.

It is a worrying situation when small business owners are struggling to keep their heads above water, and are rushing around trying to ensure that their business doesn’t close.  Sometimes you have to take time out from being too close to the problem and consider the options.  Running around all the time to keep afloat won’t help in the long term; however because they are under so much pressure they can’t see a way out.

Listing priorities and looking to implement them, even if part of the work can be delegated to a member of staff can make a huge difference.  Many business owners think that they need to do everything themselves.  As it is their business, they feel that they need to be involved in every single decision and check up on everything anyone else does – because no-one can do it as well as them.

They may not consciously be thinking this, but many small business owners are the same.  Even with only one or two members of staff who can take much of the stress away from the owner, the owner won’t let them.

There comes a point when eventually it becomes too much and the owner becomes ill or the business fails.  In many cases this is unnecessary and with small changes the staff and owner would have been involved with a business which could have succeeded, or made higher profits than at present.  Involve the staff with decisions – they will want to assist both the owner and the business.  In many situations they enjoy having some responsibility and certainly won’t let you down.

Let them find the way to reduce your energy bills – in other words, save money by making small changes which result in huge savings.  This will leave time for the owner to concentrate on getting more business – which is usually what they do best.  The majority of small business owners aren’t the best with administration and looking after accounts.  Let the staff get on with it – leave them to make changes, and concentrate on doing what you do best – looking after the clients.