Reducing staff (36%), reviewing expenses (35%) and cutting back on marketing (30%) are the biggest changes being made by SMEs in ongoing attempts to cut costs during the Coronavirus pandemic.
Reviewing commodities including insurance and utility costs come bottom in the list of money saving exercises, with salary reductions and reducing operating hours coming above reviewing supplier.
However, as UK unemployment hits an all-time high, figures from Yu Energy show that a business on a deemed tariff is overpaying on utilities by up to 65%, leading the company to urge businesses to review all its service costs in the tough economic climate.
Analysis of thousands of business energy contracts has found that a typical business could be overpaying on their electricity bill by 44% and their gas by 65% if they are on an out-of-contract tariff.
The research of 500 small business owners conducted by Yü Energy also found that two fifths (40%) haven’t changed energy provider in the last three years or more, leaving them likely to be out of contract and overpaying.
More than a quarter disclosed that they are unaware as to what energy tariff they are on (26%) or when their current contract is up for renewal (26%). Whilst one in five business owners (21%) couldn’t name their current energy supplier.
In response, Yü Energy has released a free energy health check tool which, following analysis of thousands of energy records calculates whether a business’ energy usage could be excessive for its industry and its size.
Money-saving factors businesses have actioned since the pandemic
- Reduced staff (36%)
- Reviewed expenses (35%)
- Cut back on marketing (30%)
- Introduced new energy efficiency measures (30%)
- Reduced hours of service (28%)
- Reduced salaries (24%)
- Reviewed stock (20%)
- Cut down on maintenance (18%)
- Changed energy supplier (16%)
- Changed insurance provider (11%)
Simon Smith, Director Sales and Marketing at Yü Energy said:
“Businesses are looking for ways to save money more than ever to survive the pandemic. Being more energy efficient and having a competitive energy tariff has the potential to save hundreds on energy bills and that’s why now is the perfect time for businesses to take control of their energy use.
“As businesses head into one of the toughest winters they have been faced with, implementing energy cost saving factors such as switching unused devices off, installing smart meters and switching energy providers could be the simplest solutions to reducing hefty winter energy bills.”
More than three quarters (77%) of business owners think they overpay for their energy, however a staggering 45% admitted to not knowing how much energy their business uses.
Reasons for not reviewing suppliers included being happy with their current provider (29%), not wanting to pay exit fees (27%) and being worried about customer service (21%).
As well as reviewing costs, the tool gives business owners a head start to see how efficient they are. Nearly half (46%) of businesses asked agreed that being more energy efficient is something they are actively working on.