Here we examine some pointers to make sure you get the best deal for your business when you decide it’s time to switch suppliers.
Around 82 per cent of small and medium-sized businesses review energy supply arrangements when the contract comes up for renewal, according to a 2016 report for Ofgem.
This figure has increased since 2014, when only 73 per cent of businesses reviewed arrangements during the renewal window, which suggests that information about renewal dates is becoming a more significant trigger for contract review.
In fact, the study found that recent businesses to switch suppliers and those who had recently looked around are more likely to take notice of renewal letters. These may either be triggers for switching, or part of the information gathering process, but regardless those receiving prompts that a contract is due to end are more likely to be on the market.
The reason for this correlation is simple – you get a switching window, and outside of the window switching will incur a fine. When businesses receive notice that the window is imminent, that’s the time to shop around and find a deal to switch suppliers, or renegotiate a deal with the current supplier. Failure to do this will in many cases result in a rollover contract, which can be more expensive that the initial starting rate.
This is the first, and most crucial, piece of advice for switching – keep a note of when your contract ends, so you have optimal time to scout out new deals.
Don’t get caught out on cost
The Ofgem report found that two thirds of businesses with a fixed-term contract have either one-year (32 per cent) or two-year (34 per cent) contracts. On the one hand, this offers a great deal of flexibility to these businesses, and will provide more regular opportunities to switch.
On the other hand, a one-year contract means researching and shopping around new suppliers every year – and it means keeping on top of that switching window. Some suppliers out there will offer up to five-year fixed contracts, which can put your mind at rest and allow you to budget with certainty for the years ahead.
Around 62 per cent of businesses with fixed-term contracts know when to renegotiate or terminate energy contracts: 46 per cent know approximately, and 16 per cent know exactly.
Of the businesses in the survey whose previous contracts were rolled over, ten per cent were unhappy with the process, citing price increases, poor communication and renewing without the business’ knowledge as reasons for this.
Don’t let your business be one of the ones that gets stung – choose the type of contract that is right for your business, and be sure to monitor it.
Switch suppliers: The process
When it comes to actually making the decision to switch, you’ll need to shop around to find the best deal.
“We simply hate switching suppliers but find it a necessity. When you instigate talking about it, you get bombarded with hundreds of energy companies trying to punt for your business, and this alone can be crippling to a small business,” warned Liz Storey from Ignite Business Enterprise.
“They all want you to tell them about what you have, and sell you the cheapest and apparently best option.”
The safest course of action here is to make sure you find the deal that’s best for you.
Beware of price comparison sites, as they don’t include all suppliers and all available tariffs. The best way to find out what a supplier can offer you is to speak to it directly, and take some time out to make a few calls.
To request a quote from a supplier, you will need your electricity supply number and/or gas meter point reference number, which can be found on your invoice.
Once you have selected a new provider, simply make the call to switch – and be sure to make a mark on the calendar when the new contract expires.