Running a business is a matter of spinning plates, no matter your industry, specialism or even the size of your enterprise. It is an incontrovertible truth, borne of the many difficult considerations that go into keeping a business not just afloat but profitable; everything from managing stock and stockists to managing employees has a profound impact on the longevity of a business. And this is before we get to the matter of energy.
Energy is a sticky subject, too, for businesses no matter their industry. Commercial energy rates differ considerably from domestic energy, and are, indeed, a make-or-break consideration accordingly. The high price of commercial energy, thanks to variable rates and an archaic government policy on energy prices, means business energy costs trump almost all others.
But choosing the right business energy solutions is not just about price. It’s also about stability, risk management and alignment with organisational goals. Informed decision-making is nothing short of crucial for long-term operational and financial planning. Here, then, let’s explore what it means to figure out commercial energy solutions for your business.
Energy Needs and Usage Profile
Before starting to look earnestly at market options, your first step towards choosing the right energy solution is should be clear and comprehensive assessment of your business’s energy needs and consumption patterns – both current and forecasted. Couple this with broader relevant information about your business, such as your commercial premises and the length of your contract with such premises.
Doing this in advance will give you invaluable information, which can be used to more accurately tailor energy products to your specific needs. Such specificities include contract length, flexibility requirements and whether fixed or flexible pricing could suit your budget and operational rhythm.
Contract Types and Pricing Structures
UK businesses face a complex energy market with different contract types, supply options and cost structures, which makes it particularly difficult to sift between viable products – and to make a shrewd contractual decision accordingly. Broadly speaking, there are two types of contract: fixed-term and flexible-purchasing.
Fixed-term contracts allow you to lock in at a specified price for a period of time; these offer security at the expense of being locked out of price drops, and of a ‘risk premium’ thrown in by suppliers. Flexible purchasing means variable prices, which can save money in the long term but also expose you to risk. There are hybrid ‘pass-through’ contracts too, which enable you to fix some prices and allow other ancillary costs to fluctuate with the market.
Consider Reliability, Compliance and Market Developments
Effective business energy solutions should balance cost control, supply reliability and flexibility as market conditions change. Where your businesses stands on these fronts is something worth considering, though, as some suppliers offer certain benefits in different areas. For most businesses, reliability of supply is considered as important as price when choosing contracts, particularly as demand increases during winter months. This emphasises the need to consider service continuity, regulatory compliance and evolving market conditions when selecting energy solutions.
