There’s no getting away from the news on energy prices, which will be increasing dramatically at the beginning of April. It’s going to be challenging for all bill payers; but we want to look at the effect it will have on business owners.
We’ll delve into the reasons why they’re increasing, and provide some tips to help you save money where you can!
Why are energy prices increasing?
Several factors have contributed to the rise in energy prices, the latest being the fallout from the sanctions on Russia. Since the start of this year, the cost of oil has risen 70%, whilst natural gas prices have risen a shocking 300%.
What impact will the rising energy costs have on business owners?
According to iNews, 5 leading business groups, including the Confederation of Business Industry (CBI) and the Federation of Small Businesses (FSB), have urged the UK government to take action about the rising energy costs. They argue that business rates should be discounted to offset the price increases.
Without government help, there’s a high chance that economic recovery after Covid-19 will slow down, and business owners will lose their confidence to invest.
To further support this point, BBC News Scotland states that 1 in 5 businesses are bracing themselves for cuts due to the rising cost of energy: with only 7% expecting strong growth in the next 12 months.
Whenever business costs increase, it can put an end to any investment plans. Those who were seeking to hire new staff or expand are likely having second thoughts now.
Some businesses might also decide to pass on the rising costs to their customers by charging more for products and services. Although this might seem like a good solution in the short term, it ultimately makes the business less competitive. As a result, even loyal customers might end up looking elsewhere if they’re being overcharged.
To reduce your energy costs long term and discover how to implement valuable changes to your business, keep reading.
Achieve your NetZero plans
In October 2021, a huge climate change conference took place called COP26. Many important world leaders attended, with the aim of creating a strategy to reduce global warming.
In the coming months and years, there’s going to be pressure placed on business owners to become NetZero. To achieve this, they’ll have to ensure that the amount of greenhouse gases they’re adding to the atmosphere are equal to, or less than what they’re taking out.
If the whole of the UK can get to this point, then effectively, we won’t be contributing to climate change.
According to the Institute of Directors (IOD), 4 in 5 directors believe it’s important for their business to operate in a sustainable way. However, only 26% have put in place a strategy to move towards being NetZero.
Whilst it can take many years for a business to implement some of the big changes, making a start to become more sustainable can lead to immediate savings, and reduce energy costs.
Professional Energy claims that every year, UK businesses lose £60m in wasted energy.
Here’s some quick energy saving tips which you could introduce to your business to save you money and become more sustainable:
- Invest in high quality insulation
- Install good quality windows, heavy doors and blinds
- Shut off unused areas, and ensure heating and electricity is switched off
- Use a smart meter
- Turn your thermostat down by 1 degree
- Maintain your premises and fix any leaks or issues
- Switch to energy efficient light bulbs, and turn the lights off if they’re not in use
- Make your staff aware of their energy consumption, and teach them ways to reduce it
- Become paperless
…and finally, look at solar panels and heat pumps, which have a cost up-front but can significantly reduce your energy bills.
Where can I get guidance and funding from?
The UK government has introduced many local schemes to help businesses become more sustainable and reduce their energy output and costs. Many of these schemes offer both guidance and funding. You can view this website to find out more.
How can Capify help?
Capify has been providing finance to UK business owners for almost 15 years. We offer from £5,000 – £500,000 and the funds can be used for any business purpose.
If you’ve made plans to train your staff, purchase another premises, place a large stock order or buy new equipment, you don’t need to put them on hold because of the energy price increases. With Capify, you can invest in your business and achieve your plans. Our loan can also be used for cash flow, so that you have something extra to rely on as funds come in and out of your business.
In addition, Capify’s finance could help you implement energy saving plans, so that the price increases don’t affect your business as much! You could do one of the things we’ve suggested above, or anything else which will help your business to become more sustainable.
To get a free no-obligation quote, and find out more about our innovative business loan, click here.