After a challenging twelve months, smaller businesses are looking forensically at every aspect of their operations. Legacy processes are being reassessed in favour of more nimble and transparent ways of working.
The vaccine is with us and the planning is in place for a return to something approaching normality. But businesses of every scale know that there is still much hard work ahead in order to establish a firm footing for the future. This is certainly the case for SMEs. Research published by the London School of Economics suggests that almost 15 per cent – more than one in seven – UK businesses are at great risk of imminent closure. “Micro” businesses – those with fewer than 10 employees – are particularly vulnerable.
As if the challenge of the pandemic has not been enough, SME businesses in sectors such as hospitality, retail and travel have had to contend with another issue. In many cases, these businesses have been frozen out of competitive energy deals by traditional energy suppliers. Why? Simply because traditional suppliers now deem businesses in such sectors as too risky, fearing that they will fold and leave debt.
To address this situation, businesses are turning to suppliers that can offer greater flexibility and transparency. In fact, all small business owners – not just those adversely impacted by Covid – need flexibility from service suppliers; solutions that recognise that such businesses may be seasonal or may have to close on certain days or might require room to negotiate cash-flow bottlenecks. Indeed, cash-flow is a perennial problem. A recent study conducted by the Department for Business, Energy & Industrial Strategy found that 78% of UK SMEs are forced to wait at least one month beyond their agreement terms before being paid.
Our solution to these challenges is SmartChoice, a new energy proposition for the small business market which enables customers to purchase energy in advance and only pay for what is used. The solution serves an immediate need by providing businesses who might be struggling to find sensible energy deals right now with access to competitively priced, 100% renewable energy. But additionally, SmartChoice enables every SME to take back control of its energy spend, to buy what it needs up-front and to avoid any surprises that can arise from monthly bills and being in arrears.
Technology drives this solution. Using an app or web portal, customers can track usage, see their current balance, download invoices and set up payment options. This instant, holistic view of their energy account enables businesses to make quicker, more informed decisions about energy consumption and drive towards improved energy efficiency.
Of course, energy supply is just one element of a business’s operating costs. But this flexible mindset is proving important across the board as SMEs look to re-emerge in a stable and measured way. Flexible thinking is also being introduced to other core areas such as staffing – with a greater focus on freelance and temporary staff. And business premises are being reassessed under this new focus on flexibility, with permanent fixed-cost offices being swapped for pay-per-session co-working space.
Energy supply planning may not be top of the list for small businesses when they start out, with attentions understandably on more visible aspects such as sales, customers, marketing and staffing. But, after an extremely challenging 12 months, businesses are looking for every opportunity to reduce expenditure, improve financial control and be better prepared for any future disruption.
Why further punish businesses in sectors that have been hardest hit by restricting access to competitive deals? SMEs are the backbone of the UK economy, and the sooner that suppliers can power these businesses back up to full throttle, the better for all in the business community and beyond.