Whether you’re starting your business from scratch or moving to new premises you’ll need to organise the supply of basic utilities: gas, electricity, water and telecommunications.
This guide is designed to help you choose the right gas, electricity, water and telecommunications provider to suit your needs. Picking the right provider is about getting the best deal for your business at the best possible price.
Since the deregulation of the gas, electricity and telephone industries, customers have been able to pick and choose who supplies their services and make substantial savings on their bills. Competition is fierce and providers are keen to sign up business customers, so it’s always worth discussing your needs in detail to negotiate the best deal you can.
Gas and electricity
Choosing a gas supplier
The first step is to find out how many suppliers there are providing gas in the industrial and commercial market in your part of the UK. If you get a list of suppliers (see Useful contacts, below) you will then be able to find out what they can offer you and your business. It’s worth talking to several suppliers to find out what they offer their business customers.
Choosing an electricity supplier
Once again, it’s worth shopping around to find the best deal for your business.
Getting the best deal from your supplier
While you can pay for your gas supply for your business as you would your domestic gas, on a standard tariff, there are special deals available to businesses.
Gas suppliers offer most of their business customers the opportunity to take out an agreement or contract for the supply of gas for a period of time. The price is then fixed for the year, or however long the agreement is for. This can be helpful when it comes to budgeting, and should represent a saving on the standard tariff.
Electricity suppliers offer similar packages to business customers including fixed-price deals to businesses that use over a certain amount of electricity. These generally represent a saving on their standard tariffs.
Bigger businesses may be able to negotiate even better deals. For example, if you run a small manufacturing business and need electricity to operate machinery, then you may be able to get a better deal than an office-based business only needing electricity for lighting and computers.
Managing more than one site
If your business has more than one site, then you could make even greater savings. The more gas or electricity you use, the more valuable you are as a customer. So make sure any quote you are given takes into account both the size and type of your business.
Taking over a new business premises
If you’re moving into premises previously occupied by another business, it’s a good idea to check who their service providers are and to contact them as soon as possible. Either ask the company themselves or the agent who arranged your deal. Ask them to quote prices for your business and that will give you time to shop around to see if you can find a better deal elsewhere.
Renewing your contracts
Your current deal may seem good value but it is still worth your while looking at alternative suppliers occasionally. If possible, start getting quotes around a month before your current electricity contract expires and at least three months before transferring gas supplier. Check with the potential new supplier(s) what the process is for transferring your account. Also, let your current supplier know that you are aware that your supply is due for renewal, and see what you can negotiate.
What to ask a gas or electricity supplier
When shopping around for the right provider you might want to ask some of the following questions to help narrow down your options:
How can you reduce your costs?
You can make extra savings by paying your bills by direct debit. Paying a set amount each month may also help your business to budget for its fuel bill.
It might be cheaper to buy your gas and electricity from the same supplier in a dual-fuel deal. However, it is not always the cheapest option. When shopping around it’s a good idea to compare dual-fuel deals with different companies as well as buying from separate suppliers.
It is usually cheaper to sign an annual contract with a supplier and so buy your fuel at a fixed rate. If you tie in for longer you may save even more money, but check what happens if you want to cancel the agreement.
There are now a wide range of utility comparison websites you can use to cut your bills. Try www.uswitch.com or the government-backed Energywatch website www.energywatch.org.uk.
Reading the small print
Before putting your signature on the dotted line there are a number of things you should do:
Telecommunications
The telephone is a vital lifeline to a business. The public telephone network was opened up to competition in 1984 and is now divided into network providers and service providers. Network providers – BT and cable companies – supply their services direct to your premises. Service providers, otherwise known as ‘billing only’ services, use the infrastructure of the network provider to offer their telecoms service.
Choosing a telecoms provider
You can choose to buy all your telecoms service from one of the network providers or you can choose a different service provider for some or all of your calls. Prices are competitive so you need to shop around.
Service providers generally offer cheaper deals on certain types of calls, for example international calls. They are either accessed by dialling a prefix number before you make the call or by routing a call through a box that automatically dials the prefix.
Alternatively, they can be accessed by carrier pre-selection (CPS). In this case you don’t need to dial a prefix or use an adaptor box, instead the calls are carried by a company selected in advance.
Deciding on the package
It’s worth spending some time discussing your business needs with various telephone service providers. You’ll need to consider, among other things, how many phones, extensions and external lines you require, whether you will have a receptionist answering incoming calls, and what sort of Internet access you need.
What to ask a telecoms provider
How can you reduce your costs?
It may be cheaper to buy your service, equipment, installation and maintenance service from different providers.
Mobile Phones
Another consideration is whether your business needs to provide its employees with mobile phones. Again, shop around. Draw up a list of what your needs are. For example, will your staff need to use their mobile abroad? Will they need a mobile to use with their laptops?
Water
Competition is limited in the water industry. Most small and medium-sized businesses are unlikely to have a choice as to who provides their water and waste water removal. Commercial premises have to be fitted with a water meter and so the amount you pay will be based on how much you use. A corner shop, therefore, is likely to have a smaller water bill than a hairdressing salon, while a hairdressing salon will use less water than a brewery. The price of water is proportionately cheaper the more you use.
Water companies offer special deals for large users of water, typically businesses using more than 50,000 cubic metres of water a year. Ask your local water company for details.
Whilst you may not be able to shop around for your water supplier, you can do much to reduce your water bills. Various consultancies can help you reduce water consumption or you can identify wastage yourself. Below are a few examples:
Real stories
Kazoo Communications is a London-based public relations company specialising in brand-building, entertainment, music and lifestyle communications. The company recently moved into new offices in north London.
Nick Mulholland, associate director, says: “Running an international PR business means that we need to be contactable sometimes 24 hours a day – either by landline, mobile or email. We can’t afford to be without any of these communications tools even for a second!
“We have on average a call coming into the office every minute from 8.30am onwards – and that's not counting staff making outgoing calls.
“It’s a stressful event moving office – but top of the list had to be the phone switchover. Key for me was that we wouldn't miss one call. We decided to go with BT in the end – we looked at all the options available and, while they have more expensive call charges, we felt that they offered a reliable service.
“There was an electricity company already supplying electricity to the office when we moved in but we decided to shop around to see if we could save money. And it paid off. By switching to another supplier, we expect to cut around 20 per cent off our bill.
“We pay for our electricity monthly but we’re now considering going onto an annual contract which should save us even more.”
Useful contacts
