British SMEs overspending by 24 per cent on energy bills

Not switching their gas supplier is costing small businesses considerably, research finds.

A new report, conducted by Flogas, reveals that SMEs in England, Scotland and Wales currently waste in excess of £1.7 billion a year by not switching their gas supplier.

According to the report, businesses such as restaurants, warehouses, offices, manufacturing buildings and public sector buildings currently spend a whopping £7.1 billions on gas for their business needs – 24.4 per cent more than they need to.

For a business that spends £10,000 on gas each year, switching supplier could save an average of £2,400, equivalent to £200 a month.

However, despite the obvious savings that could be made, the Flogas Business Energy Report 2016 finds that a staggering 32 per cent of businesses aren’t aware of the savings that could be made by switching, and almost a quarter (23 per cent) think it would be too time consuming or complicated.

Worryingly, one in ten business owners say they ‘couldn’t be bothered to switch’, and 13 per cent state that they want to switch but haven’t got round to it.

Regionally, businesses in the North West of England are wasting the most money, followed by those in Yorkshire and Humberside, and London, who each cumulatively waste more than SMEs in the whole of Scotland.

Cutting costs

The increasing pressure for businesses to make a profit makes cutting costs a high priority, and reducing the cost of energy is one of the best ways to do so.  In fact, the ‘Flogas Business Energy Report 2016’ finds that more than half (54 per cent) of businesses questioned, named reducing energy costs as the number one way to reduce overheads.

Commenting on the findings, Pete Ablett, commercial director at Flogas says, ‘Many businesses don’t realise they are literally throwing money away by not switching.

‘We find the most common reasons that businesses don’t switch are a lack of awareness that there is a cheaper alternative, or because they are under the misconception that switching is complicated. By sharing these figures we hope to wake people up to the money they could be saving.

‘We know that we can save businesses around 24 per cent a year, especially if they haven’t changed their supplier recently, and switching to Flogas is so simple. Just tell us you want to switch, and we’ll do everything else, including telling your old supplier.’

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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