Energy prices are rising dramatically at the start of April, and there’s simply no getting away from it. The change will pose a challenge to all bill payers; however, we want to examine how it will affect small business owners.
In this post, we will discuss why costs are increasing, as well as share some tips that could end up saving you tons of cash!
So, why are energy prices on the rise? A number of factors have led to the rise in energy prices, the latest of which is the fallout from the sanctions against Russia. The price of oil has risen 70% since the start of the year, while the price of natural gas has risen by 300%.
What impact will the rising energy costs have on small business owners?
INews reports that five leading business groups have called for the UK government to take action about rising energy prices. These groups include the Confederation of Business Industry (CBI) and the Federation of Small Businesses (FSB). Businesses are advocating for a discount on business rates.
Business owners will lose their confidence to invest if government assistance is not provided after Covid-19.
As additional evidence of this point, BBC News Scotland reports 1 in 5 businesses are preparing themselves for cuts as a result of rising energy costs, with only 7% expecting robust growth.
Any investment plans can be put on hold when business costs increase. Employers who were considering expanding or hiring new staff are likely to rethink their plans.
Alternatively, some businesses may decide to raise the prices they charge their customers in order to cover the rising costs. Although this might seem like a good solution in the short term, it ultimately makes the business less competitive. When overcharged, even loyal customers might look elsewhere.
Discover how implementing valuable changes to your business can lower your energy costs long-term.
Achieve your net zero plans
A huge climate change conference called COP26 took place in October 2021. Participants aimed to develop a strategy to reduce global warming with the attendance of many world leaders.
Business owners will be under pressure to become NetZero in the coming months and years. For this to work, their greenhouse gas emission must be equal to, or less than, what they are taking out of the atmosphere.
Rather than contributing to climate change, the entire UK will be able to reach this point.
Approximately four out of five directors surveyed by the Institute of Directors (IOD) believe it’s important for their businesses to operate in a sustainable way. Despite this, only 26% have implemented a NetZero strategy.
Even though some of the big changes may take a long time to implement, taking action now to become more sustainable can result in immediate savings and lower energy costs.
UK businesses waste £60 million worth of energy every year, according to Professional Energy.
The following bullet-pointed statements are ideas on how your small business venture could possibly save cash:
- Ensure your premises is well insulated
- Install high quality windows, blinds, and heavy doors
- Make use of a smart meter
- Shut the doors to unused areas and ensure the heating and electricity is turned off
- Maintain your business’ building and fix any leaks or issues
- Make the switch to energy efficient lightbulbs
- Attempt to make your business paperless
- Invest in solar panels and/or heat pumps
Where to look for guidance and funding
Many local initiatives have been introduced in the UK to assist businesses in becoming more eco-friendly and reducing their energy consumption and costs. The schemes provide guidance as well as funding. For more information, visit this website.
In addition, there are two terrific resources: Energy Saving Trust and Carbon Trust. Interestingly, both provide insightful information about how to become more energy efficient.