Energy costs are a frequently neglected part of a business’ expenditure and using an expert energy broker can quickly get you saving money in an overlooked area of your business.
Too often, the energy costs of a business are put on the backburner. The prospect of doing all the necessary market research, comparing quotes and then still negotiating from a point of relative ignorance is not enticing.
Comparison websites for a business energy supplier are very different to their household counterparts. It can be hard to tell the wood from the trees when factoring in such complications as a quote that spans multiple sites in your business.
A comprehensive study by a UK Government Department (The Competition and Markets Authority) determined that 55% of businesses had been with the same supplier for more than 3 years. That number only reduced to 40% when looking at businesses changing suppliers in the last 5 years.
This inertia isn’t limited to large businesses either. In another part of this investigation, the same study found that 45% of microbusinesses (defined as businesses employing less than 10 people) were on a default contract. It should hopefully go without saying that a business will nearly always stand to save money from negotiating an energy contract rather than accepting default energy contract terms.
With this in mind, an energy broker can be an important ally to help break the culture of apathy that can exist around energy costs in a business.
That’s why we’ve answered the 10 most commonly asked questions regarding making the switch and other important issues, so you can get started right away.
Question 1: Can I trust an energy broker to make the right decision for my business?
An energy broker will be regulated by the Office of Fair Trading and will be expected to be in full compliance with consumer protection laws. In addition, they have to adhere to the Business Protection from Misleading Marketing Regulations and as such they cannot mislead a business in order to gain its custom.
Due to the business/client relationship, energy brokers can offer a level of impartiality unmatched by comparison sites.
Question 2: Why shouldn’t a business search for energy quotes online, direct from the supplier or a comparison website?
While the temptation to go directly to an energy supplier or to a comparison website exists, it will more likely than not turn out to be a frustrating and time intensive process. Here’s the problem with both approaches…
Using Comparison Websites As A Business:
Comparison websites are everywhere these days, and in certain sectors they are incredibly useful. However, when it comes to finding an energy supplier for your business, they are often not up to the task. In a study by OFGEM, the government regulator for gas and electric, it was found that very few of the businesses studied even considered a comparison website. Of those brave few, none of the businesses involved actually used a comparison website to arrange their current contract.
While they are great for the domestic market, they’re simply not built to handle the complexity of a business’ energy supply.
Going To The Energy Supplier Directly:
The main problem with going direct to an energy supplier is that they have a vested interest in signing you to their product and their product alone. Without a business consulting a multitude of energy suppliers and doing intensive research to ascertain the state of the energy market, this can become an exercise in tedium.
We’ve done our own more in-depth write up on this issue here.
Question 3: Will an energy broker give me all the options available?
An energy broker certainly has the expertise to give a business all the options available. However, one key advantage of hiring an energy broker is their existing relationship with certain energy suppliers.
The familiarity and trust that can exist between broker and supplier can be invaluable. Not only will it allow the broker to negotiate the best price on the business’ behalf, the business will know it is obtaining a service it can depend on much more than a faceless logo on a comparison website.
Question 4: Will an energy broker take my preferences regarding an energy supplier into consideration?
Like any client relationship, an energy broker will take your preferences into account, they may even negotiate with specific energy companies on your behalf.
It is important to note that an energy broker will have a more intimate knowledge of which energy suppliers are likely to be the best fit for a given business. An energy supplier may only want to take businesses of a certain size and an energy broker will have the expertise to ensure as little time as possible is wasted.
Question 5: How much information will the energy broker require from my business?
An energy broker will require a few key pieces of information from a business: This will normally include your business’ registration information, your MPAN and MPRN numbers, a recent bill and the start and end date of your existing energy contract or contracts.
Nearly all of this information can be swiftly ascertained from a single energy bill and an energy broker will happily talk you through gathering the few pieces of information required.
Question 6: When switching, how are prices compared?
An energy broker will compare based on the all available metrics, which they will be familiar with. This will include ‘Cost per kWh’, which is a coverall figure for the cost to the supplier per unit of energy used and a standing charge, which is a fixed cost that covers all other expenses, such as maintaining the grid.
A broker will also be able to take into account factors that do not translate easily into cost, such as finding a supplier that is right for the size of the business in question or has other benefits like great customer service and emergency response times if anything goes wrong.
Question 7: Once an energy broker has found an energy supplier I approve of, how long will the switch take?
Once everything has been agreed, the process of switching over will normally take roughly six weeks from the termination of your existing contract.
Question 8: What makes for a good energy broker? How do I select an energy broker?
As with most services, certain things will stand out when you look for an energy broker. Experience is invaluable in the energy market and provides both the contacts and expertise necessary to operate in the market.
Qualities such as this will be attested by the clients and customers of an energy broker, which any diligent energy broker will include on their website.
Lastly, contacting an energy broker via e-mail or telephone will help understand the broker you are dealing with and whether they are right for you.
The key is clarity. If you feel like an energy broker is being upfront and honest about the realities of the market, then you can be sure that they have your back.
Question 9: How does a broker make money? Will I be charged for the service?
This varies from broker to broker. Some brokers collect their entire fee from the energy supplier. Others might take a flat fee for the negotiation of a contract.
If you opt to remain with the broker in an aftercare service, additional fees would be paid at intervals for the numerous services they provide. For several examples, please follow this link.
Question 10: What other services can a broker provide after the switch?
Finishing the big switch needn’t herald the parting of ways between business and energy broker. There are other services that a broker can provide all-year round to ensure that a business is on-top of its energy bills.
This can include ensuring that the best deal is obtained every year, dealing with overcharging, meter ratings, bill validations and check-ins.
To find out how much your business could stand to save, you can take our completely free Business Energy Enquiry, which will give you an estimation of how much you can save by switching your supplier.
