If your contract is almost up, or you are in the process of negotiating your first one, then your decision could affect your business for years to come. Hidden fine print could have severe repercussions on your business’s overhead costs, margin, and ability to survive. But knowing how and where to shop for energy, and how to leverage your current situation is essential if you want energy companies to work for you, not the other way around. Here are some of the mistakes you should avoid when renewing or purchasing an energy contract for your business.
Waiting Until the Last Minute
Companies are obligated to let you know when your contract is up within 60 days of expiration. But you should be working on a new deal much sooner, either with the same supplier or elsewhere. Some people advise that you should start negotiating a new contract as soon as 12 months before the expiration date.
One thing you could consider is working with a broker that will be able to negotiate on your behalf way before your contract is up. Energy brokers like Utility Bidder, for instance, will work for you and offer services like automatic business energy renewals to make sure that your next contract will be taken care of and tailormade for your operation. You can’t afford to wait only to be hit with crippling variable rates that could change the whole colour of your forecast for the next few months or years.
Sticking with One Provider for too Long
Some people stick with the same supplier because they feel comfortable and like the idea of working with people who know them. But this familiarity comes at a price. In most cases, staying with the same supplier means that you’ll end up paying inflated prices on energy.
This is another reason why it’s important to know what the termination date is on your contract. If you do decide to switch suppliers, you have to make sure that you have sent your termination notice in time to make sure that you are not stuck with an unfavourable contract. The timeframe to send your termination notice will differ depending on the supplier as well, so make sure that you’re aware of that.
Looking at Cheapest Rates Only
Going for the cheapest rates is one of the biggest mistakes you can make. So many other factors can affect how much you’ll have to pay. For instance, some companies will charge you a feed-in tariff in addition to your rate, whereas others will have a higher standing charge, and some might offer you a discount for direct debit. So that’s all factors that you’ll have to consider besides the going rate.
Also, the solution has to work with your particular energy needs. For instance, a variable rate might not be the best option for an office building, but makes sense for a hair salon or restaurant. So that’s another thing you’ll have to take into consideration as well.
Not Examining Your Bills
Don’t make the mistake of blindly paying your bills and assuming that your company won’t make mistakes. Energy suppliers make mistakes all the time, and it’s your responsibility to make sure that they didn’t commit one on your bill.
You should not only check your standing charge and rate, but also things like VAT and Climate Change Levy. If you don’t, you could end up overpaying over the whole course of your contract. Make sure that any CCL exemption that you may have is accounted for, and that VAT discounts are applied as well if you’re eligible. The same goes for direct debit discounts.
Also, make sure that you keep a close eye on your consumption. Check if the consumption is an estimation or if it’s your actual consumption. The company might be overestimating your consumption, which will result in additional charges even if the rate is correct. If you have a smart meter installed, the consumption should be sent automatically to your provider, but if it’s not, it would be wise for you to send it yourself to avoid mistakes.
Purchasing your energy contract is one of the most important decisions you can make for your business, and a small mistake could be the difference between being profitable and being in the red. So, make sure that you avoid all these mistakes, and consider working with a professional that will make sure that you get the best deal for your operation as possible.