Electricity prices – an important factor when you run a business
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When it comes to running a business, there are many factors to take into account. One of the most important is electricity prices – and how this will affect your bottom line. In this article, we will explore the impact of electricity prices on business owners and consumers, as well as what steps you can take to minimise the impact.
When running a business you will have lots of outgoing business costs, and if you have your own business premises or rent a premises then one of these costs will be for business electricity. Business electricity is one of those expenses that should be a priority. No business can function without it!
However, a productive business means a profitable turnover with minimal outgoings where possible. So you need to ensure you are getting the best electricity prices for your business, saving money on energy where possible and not losing profit unnecessarily.
Business electricity vs. domestic electricity - what’s the difference?
The electricity which is used in your private household to run appliances or electronics is known as domestic electricity. But the electricity which is used in a commercial space for a company is known as business electricity.
If we do the comparison of business electricity price with domestic electricity consumption, then you’ll find business electricity prices to be more expensive. One reason for this is because business electricity has more VAT (typically 20% for business electricity compared to 5% for domestic electricity).
Another reason why businesses may appear to have higher bills is because their energy consumption can be so much more than that of a domestic property. With power-hungry machines, appliances and software switched on for the better part of the day.
Business electricity prices: how to save money
Though electricity is mandatory in any business, cost-cutting in business electricity prices would help to increase the business revenue.
There are lots of ways to keep your business electricity costs down. These are:
- Buy appliances which are energy efficient
Before purchasing anything for your company, check the energy efficiency rating, just like you would with your home appliances. It can be a little more expensive to buy A rated products, but it will be cost-effective (as well as better for the environment) in the long run.
- Supervise consumption of energy
Again, just like at home, watch your energy consumption and don’t waste energy. Consider sensor lights for rooms like toilets, hallways and cupboards to ensure staff members don’t forget to switch lights off. Have a shutdown procedure at the end of the day that must be followed to ensure your team members don’t leave their equipment switched on once they have left work for the day.
- Be a smart citizen
Replacing bulbs that take a lot of energy with LED lighting and CFL, using sunlight instead of artificial light in the daytime, using different types of energy-saving features on your desktop or laptop, introducing programmable thermostats… All of these features will lead to less energy consumption.
- Stop printing
Do you really need to keep printing paper and storing hard copies of documents, or can your business survive in the digital era with online documents instead? Less printing will not only save money on electricity, but will reduce outgoings on paper and ink too.
- Shop around for the best energy prices
Always do a comparison of energy prices and suppliers to ensure you are on the best deal whenever your electricity contract comes to an end.
- Talk to your supplier to secure a better deal
Feel like you’re being overcharged for your business electricity? Or are prices constantly being hiked? A simple phone call to express your concerns to your energy supplier could result in a better deal for your company. Customer retention teams exist for this very reason - to ensure your continued custom and happiness.
- Check out the latest government incentives
The government are encouraging businesses to go green and reduce their energy consumption with various environmental schemes. These can help to reduce your taxes. If you implement energy efficient technology or do not use much energy then you could qualify for some relief. You can find out more at https://www.gov.uk/green-taxes-and-reliefs
- Get an energy audit
Some electric utility companies offer a free energy audit. This can be useful in showing how you might be wasting energy in your company, along with resolutions.
- Reduce your opening hours
If possible, you could reduce your opening hours to reduce the amount of electricity you use. Allow staff to work from home if this is a viable option for your business. This will decrease the hours your business air conditioning and all other appliances are on, allowing you to save money on your business electric bill.
Conclusion: Best ways to reduce business electricity costs
With the price of electricity on the rise, more and more companies are looking for ways to reduce their monthly electricity bill to save money within their business. Businesses that are looking to reduce their electricity costs should consider a variety of strategies.
Companies can do this by adjusting their behaviour, such as upgrading to LED light bulbs and turning off machines when not in use. They can also save money by checking out the latest government schemes, switching electricity providers to secure a better deal, considering work from home options and more.