According to a study more than 90% of businesses in the UK are classified as small or medium enterprises. These micro-businesses although in the majority do not share the luxury of hiring additional staff or managers to maintain their energy costs. Micro-businesses in turn begin to suffer losses once they compare their electricity and energy charges. This is where we come into the picture to help Micro-businesses with their electricity price comparison. Before we go through a simple guide that explains what aspects to take into account lets first clearly define what a micro-business is.

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WHAT IS A MICROBUSINESS

There are many definitions of micro-businesses the most common one is a company that has fewer than fifteen employees and turns over less than £1.7 million a year. These definitions although muddled between different territories are much simpler when it comes to managing energy contracts. In the UK the energy regulatory body states that businesses that are classified as micro-businesses must abide by these rules:


• They must consume less than 200,000 kWh of gas a year
• They must consume less than 55,000 kWh of electricity a year
• Must manage fewer than ten employees, partake in annual turnover and balance sheet that does not exceed the budget of € 2 million


Businesses that are not aware of how much energy they are consuming daily should immediately pursue a gas or electricity comparison website. They should also get in touch with their service providers for a better understanding.


Business managers need to constantly find solutions to their daily activities. These inevitably include saving costs by making operations more efficient. Micro-businesses find it hard enough to stay afloat in today’s competitive market, comparing their businesses energy is a more daunting task. To help your business operate at its maximum potential without any obstacle we advise owners to do enough research about different business energy suppliers in the UK to ensure they receive the best deals. With the most highly rated business electricity comparison websites compare different suppliers and tariffs online that fit your business requirements.


Before your start evaluating the different business energy quotes it is best you go through our helpful guide to get a better understanding of what you need to be wary of when searching for competitive prices. We will state how commercial energy differs from residential and the necessary contracts needed for this process.

BUSINESS ELECTRICITY VS HOME ENERGY

It is common for homeowners to switch their energy providers without a hitch, however, businesses don’t have it that easy. The initial comparison when it comes to switching business energy tariffs and other variables can make the process quite time-consuming.


For starters business, electricity rates are commonly cheaper than domestic rates. Business energy suppliers use economies of scale to their advantage by buying electricity in bulk and ensuring their customers utilize it during their contract duration. This makes it easier for businesses because they pay a lower unit rate but suffer losses if they terminate their contract too early. Commercial contracts usually last for longer periods of time from three to five years regardless of particular fixed or variable rate tariffs. For as long as your contract is valid businesses cannot switch to a new tariff.


Business energy contracts can be tricky so make sure you have agreed to all of the terms before signing a contract. Business energy tariffs are not calculated together and so companies need to calculate their gas and electricity usage separately. However, there are some exceptions for businesses to compare their gas and electric rates through websites.

DIFFERENCES BETWEEN ELECTRICITY CONTRACT TYPES

Business energy suppliers in the UK offer different contact types for businesses to then choose the one that is aligned with their operations Businesses to need to be wary of different suppliers and being overcharged. Here are the most common types of energy contracts:


  • Fixed-term

These contracts are charged according to a set price per unit for the entire duration of your contract. This however does not mean that businesses will have to pay a fixed amount every month, you will still be charged according to your levels of consumption.


  • Variable-rate

Depending upon the wholesale market prices businesses can be charged a specific unit rate. According to this standard, a business’s energy bill can increase and decrease according to the price fluctuations in the market.


  • Deemed rate

Considered as the most expensive rates that can be charged to businesses. This contract comes into play if a business fails to negotiate a new deal with its suppliers or fails to switch business energy contacts.


  • Rollover

Similar to the conditions of a deemed contract, failure to agree to new terms with your previous supplier before the expiration date will result in more expensive unit rates


  • 28-day

This contract type is for businesses who have not switched their business energy suppliers since the market was deregulated.

HOW MUCH ENERGY SHOULD MY BUSINESS BE CONSUMING?

Each business has its own type of operations and functions that require different energy levels. Depending upon the sizes of your business, type of production, and hours of operation your business will consume different levels of energy. The resulting price you pay for your energy supply will be calculated through various factors such as contract type, size of the business, location, supplier, tariff, and consumption.

HOW ARE SMALL BUSINESSES ENERGY PRICES CALCULATED?

Gain a better understanding of how to compare different energy prices in the UK. Take into account the different factors that play a key role in how much you are charged. Carefully compare prices and energy suppliers to identify any problems or anomalies.


Micro-businesses electricity consumption is calculated based on these common factors:

  • Energy consumption

A common ideal, you will be charged according to the amount of electricity you consume in a given time period.


  • Unit rate

The price agreed between your supplier and you are the unit rate you have to pay. Businesses agree to pay per kilowatt-hour.


  • Postcode

Depending upon your geographical area, different rates will be paid. A region Distribution Network Operator (DNO) tends to charge different amounts to suppliers for further distributing electricity.


  • Standing charge

A fixed amount a business agreed to pay their supplier daily. These charges include the transportation of electricity as well. In the UK the average for small businesses is low but they can vary according to particular suppliers.


  • Period of billing

Businesses can choose to be billed monthly, quarterly, or yearly depending on the terms stated on their contract.


  • VAT

Standard businesses are required to pay a 20% VAT. Charities and non-profit organizations pay as little as 5%.


  • Discounts

For customers that offer on-time payments or via direct debit, suppliers are more inclined to offer discounts and other deals.

HOW TO COMPARE BUSINESS ELECTRICITY DEALS?

There is a sure quick and easy way to compare your business energy suppliers. This is a very easy process and only requires the preparation of a few documents. Start by having a copy of your mist recently paid bill and head on to an electricity comparison website of your choice.


Begin by entering all the necessary details such as the type of business you run and the amount of electricity you consume. After this step, you will be shown a detailed list of different deals and suppliers from which you can filter the best ones by choosing a target price. Each option will state information about the suppliers, contact, and duration so you can make the best choice for your business. After a thorough analysis chooses the best business energy suppliers that meet you’re your requirements.

SWITCHING BUSINESS ENERGY SUPPLIERS

Once your contract has begun to come to end businesses can choose to either stay with their suppliers or switch to other business suppliers. To make this process more seamless here is a short list of information that you will need to compare and switch suppliers.


• The name of your current energy supplier
• The current tariff name and expiry date
• The type of energy you are currently being supplied with
• How much energy you consume in kWh


Businesses who currently do not have a current bill to hand in can still search for a newer, better deal. Although it can be done we cannot promise that your free business energy quote will be that accurate.


We hope that this guide has been helpful to you and aided in solving any queries or questions you have about comparing or switch your business energy suppliers. Once you have a better understanding of how the energy supplying business works you can decipher a solution for your business to operate in a more cost-efficient and effective way. Our strongest piece of advice would be to carefully read every term on your contract with a new supplier and vet them for their services. This process can be quite time-consuming and daunting so we hope to guide and ease the process while aiding businesses in reducing their costs. Utilize the help of different gas and electricity comparison websites for additional guidance and help.

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