London you’re falling behind
Doing business in the capital right now can be pretty tricky. Yes, firms can count on a potentially large customer base, an impressive transport system and the vibrancy that comes from being based in one of the world’s biggest cities, but all is not well. Stagnant consumer demand is proving to be a major problem, as are rising energy costs. These make it hard to launch a business, to keep it running and ultimately to grow it.
Rising gas and electricity costs are hurting all UK businesses, but they’re hitting the smaller ones, that have to be extra-careful with every penny they spend, the hardest. For many London-based SMEs, energy ends up being one of their biggest overheads. This means that spending as little as possible on monthly bills is not just important, but imperative.
At first glance, cutting down on sky-high energy bills can seem, close to impossible, especially as some the UK’s largest energy firms now look set to announce further price rises. Once they do already struggling businesses risk finding themselves swimming against an ever strengthening tide. But there are savings to be found, provided you’re willing to look hard enough.
Savings are still possible…
Even as bills get set to rise by 7% next year, businesses in the capital will have an opportunity to save money on gas and electricity. Not necessarily by blindingly using less energy – although cuts may well always help – but by looking around for the right energy provider.
According to energy savings experts Make it Cheaper, companies in London’s wealthier boroughs could find themselves saving four figure sums just by switching suppliers. The savings to be had are potentially significant, with the average London company in store to save £1,936 every year, compared to the national average of £1,351.
It is rare that London falls behind in terms of innovation, and exploiting opportunity, but it seems that parts of the capital have been too content to seize an obvious opportunity.
“Despite the savings to be made, London remains relatively sleepy when it comes to switching,” says Nick Heath, commercial director at Make it Cheaper. “But there are some hotspots within London – for example the most active areas are Belvedere (DA17), Sidcup (DA14), Upper Edmonton (N18), Bethnal Green (E2) and Vauxhall (SE1).
“The least active areas with fewer than 5% of companies actively switching are Hendon, South Kensington and Thornton Heath,” he adds.
In the end, the majority of these businesses will come to switch suppliers, but they will do so less regularly than they should. Indeed, the propensity to switch among London-based businesses is far lower than that of companies elsewhere in the UK. Just 9% of London firms said they were likely to move to another supplier in order to save money, whereas 15% of companies outside the capital said they were willing to move.
“This suggests that many businesses in London are adopting a defeatist attitude when trying to combat rising energy costs, although this is not the case across the board,” says Heath.
Nowhere is this more obvious than in less wealthy London districts, where businesses are significantly more likely to switch, compared to more affluent areas where they are likely to stay put, all but burning money in the process. In those areas, less than 5% of businesses are switching supplier, meaning that the overwhelming majority of firms is losing thousands if not tens of thousands of pounds for no reason.
Companies in these parts of London may well have greater financial resources at their disposal, and may not blink twice over wasting money on higher energy bills, but it’s a comfort to know that there are other options out there. Looks like commandeering the London business landscape just got a little less tricky!
Which areas of London are being smartest about switching?
The most active areas for switching in London are:
· Belvedere (DA17)
· Sidcup (DA14)
· Upper Edmonton (N18)
· Bethnal Green (E2)
· Vauxhall (SE1)
The least active areas for businesses switching suppliers in London are:
· South Kensington
· Thornton Heath
This article is brought to you in partnership with energy saving experts Make it Cheaper
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