At Power Compare, we know that small and startup business owners want to avoid large overhead costs as much as possible. It can be difficult for them to find a lump sum of cash at the end of the month for their electricity bill. Cash flow is an issue for lots of micro and new businesses.
That is why it is important to compare business energy and find a tariff that suits your situation. Small business electricity prices do not have to break the bank. By comparing your energy, you can make real savings and focus on the things that matter to your business.
What Are Micro Businesses?
In the modern world, there are lots of different types of businesses. Energy providers supply everything from large conglomerates to micro-businesses with gas and electricity.
Micro businesses are one of the steadily growing types of businesses in the UK. The Office for National Statistics found that the number of micro businesses rose to 2.75 million in 2020, which is a 1.2% increase from 2019. Micro businesses have a turnover of £632,000 or less and have 10 or fewer employees.
How Are Micro Businesses Different From SMEs?
Micro businesses are different from small and medium-sized enterprises (SMEs). The government defines small businesses as having fewer than 250 employees. The EU states that SMEs have fewer than 250 employees and a balance sheet total of less than €43 million.
Different Types of Tariffs
Each year, there are more and more SMEs in the UK. At Power Compare, we help micro businesses and SMEs find the most reliable energy providers on the market. The first step towards finding the best provider is to understand the different types of tariffs.
- Variable-rate tariff – This type of tariff is sometimes called a standard variable tariff. If you do not ask for a specific package, your provider will put you on a variable-rate tariff. We do not recommend opting for a variable tariff because they are usually the most expensive on the market. Your provider can change the cost per unit of energy at any time, which means that your small business electricity prices can fluctuate drastically.
- Fixed-rate tariff – As the name suggests, fixed-rate tariffs offer businesses the opportunity to secure a unit price for gas and electricity. This type of tariff is ideal for small businesses who want the peace of mind that comes from locking a price in. It is a useful type of tariff for people who can time the market and secure cheaper unit prices than average. If you use more gas or electricity than the previous month, you will pay more. This is because fixed-rate tariffs only offer fixed unit prices, not fixed overall prices.
- No standing charge tariff – Standing charges are a flat fee that your provider charges you per day for having access to energy. Some small business electricity providers offer tariffs that do not come with a standing charge. To mitigate this loss, most providers have a higher unit price than average.
- Green energy tariff – This type of tariff is designed for business owners who want to take a more eco-friendly approach to their energy consumption. Green energy is a type of renewable energy. Providers can go ‘green’ by sourcing energy from renewable sources like wind and solar power. Green energy tariffs allow business owners to manage their environmental impact.
Some business owners might be surprised to find that dual fuel tariffs are unavailable to micro and SMEs. Unlike domestic homeowners, micro and small business owners cannot access this kind of tariff.
Best Small Business Electricity Suppliers
We understand that small business owners want to check items off their to-do lists and focus on their business. Gas and electricity are necessary parts of setting your business up for success. If you take the time to find the best small business electricity prices on the market, it will pay off in the long run.
There is an overwhelming choice of small and micro business energy providers. At Power Compare, we have searched through the best providers on the market to find the top 3 energy choices for SMEs.
Bulb is the best choice for SMEs. This company puts customer service and environmental practices above anything else. It impresses consumers from all around the UK, which is why it is also considered to be the best green energy provider.
Consumers are never left in the dark when they choose Bulb. It prioritises transparency, which makes renewing and negotiating contracts easier than ever before.
Bulb simplifies small business electricity prices by offering everyone 1 business tariff. Whether you have 5 or 50 employees, you can access Bulb’s tariff. As of now, Bulb’s standard rates for both gas and electricity are 27.4p per day.
It is important to remember that unit rates are different for different regions. This fact applies to all energy providers, not just Bulb.
Over 400,000 UK businesses trust British Gas for their small business electricity. This company caters to businesses of all sizes. Like Bulb, British Gas caters to micro businesses that have 1 employee and large conglomerates that have hundreds of employees.
British Gas is less forthcoming about their unit rates than Bulb. Instead of writing their rates on their website, they ask potential consumers to contact them for a tailored quote. Some companies might prefer a quote that is more specific to their regional fees, whereas others want to bag the quickest, cheapest deal possible.
British Gas offers potential customers more types of tariffs. Here are all the types of business tariffs that SMEs can contact British Gas about.
- Half-hourly meters – This type of tariff is only available for electricity. It is ideal for small businesses that open their premises to the public during specific hours. British Gas offers half-hourly meter tariffs to customers who need tailored rates that suit their hours of operation.
- Rolling energy plan – 30-day rolling energy plans are perfect for business owners who want the flexibility that comes with not being tied to a contract. This tariff proves that British Gas has small business electricity prices that suit start-up environments. The downside of this type of tariff is that the price per unit of electricity and gas is not fixed. Business owners can be struck with large bills if their provider decides to increase the rate.
- Fixed-price energy plan – We recommend this type of contract for people who want to lock in a price per unit. Consumers will have to pay more if they use more energy because this plan only fixes the price of the units. If businesses use more units, they will have a higher bill.
Utility Warehouse offers SMEs a comprehensive service. Startups and small businesses can purchase their mobile, broadband, landline, gas, and electricity needs in one package from Utility Warehouse. All these amenities come as a single bill.
Consumers who use Utility Warehouse’s tariff for 4 or more services become Gold members. Gold customers receive 10% off their overall small business electricity prices in the first year of their contract. New customers will also get £200 towards termination fees from their previous contracts.
Like British Gas, Utility Warehouse does not publish its per-unit rates on its website. Instead, the company asks prospective clients to put their details into their quote generator. Whether you need SME or micro business energy, you can find out how much your monthly bill will cost within minutes.
Switching Suppliers as a Small Business
SME and micro business owners know that there are lots of background tasks that keep a business running. Finding time to compare business energy can often fall to the bottom of their to-do list. With our quick comparison site, finding a better deal has never been easier. But business owners must be cautious about the fine print in their current energy contracts. Here are a few things to consider when switching suppliers.
Up until recently, micro business owners struggled with complicated contracts and industry buzz-words. Providers would automatically renew their consumers’ contracts under more expensive tariffs. Ofgem has recently implemented new rules which mean that renewal and switching terms are more transparent for micro business owners. Micro business energy providers must let their customers know when their contract is ready for renewal.
Both SME and micro business owners can only switch to a new supplier once their current contract has finished. Switching windows are often 1 to 6 months before the end of the contract. You can find information about your current switching window on your monthly bill.
Can SMEs Cancel Their Contract
Under normal circumstances, consumers cannot cancel their contracts. However, SMEs can break their contracts in specific situations. If your business goes bankrupt, moves address, or is on a deemed out or contract tariff, you can cancel your contract.
Deemed out tariffs are the default option when business owners move to new premises and use their previous supplier without informing them of the change. This type of tariff is given to people who have not agreed to a new contract. They are usually more expensive, which is why we recommend avoiding them.
It is always a good idea to compare business energy. Comparing energy providers is one of the easiest ways to save money on your monthly bill. By using our comparison generator, you can streamline your bills and focus on the heart of your business.
At Power Compare, we have sifted through the best providers on the market to bring SMEs reliable and affordable energy. Put your details into our comparison site and find a provider that fits into your plans. Compare your business energy today and start saving.