How Small Businesses Should Budget For Rising Energy Costs
As the colder temperatures set in and talks of snow begin to flutter around offices and homes, winter has certainly arrived in the UK. Unfortunately the usual excitement of Christmas, New Year, and winter markets has been clouded by the current cost of living crisis and the rise in energy costs. As both households and businesses face rising bills, now is a particularly difficult time and one that requires people to take a more cautious approach to spending.
If you are a small business owner, we are sure you will certainly be feeling the pinch. And with the energy crisis set to continue into 2023, budgeting is now more essential than ever. In this latest blog, we will be offering our support to small businesses who are looking to budget for the rising costs of electricity and gas.
Creating a budget for your small business
Budgeting is a vital part or running any business, and when you run a small business you’ll know that every penny counts. A budget should incorporate details about all the costs your business will incur over the next period. When creating a budget you need realistic figures, so taking into account what you have spent previously will be most beneficial.
To know how to budget with your rising energy bills in mind, it would be useful to use the past few energy bills you have received. You may also want to contact your energy supplier to discuss your direct debit payments and agree an amount that works for your business. This way you can plan for the next few months. Your budget can then be altered to review ‘what if’ scenarios, such as your energy bills increasing.
Tips for creating a budget:
- Consider all your costs both fixed and variable
- Take a look at your previous sales and use this to produce a sales forecast
- Factor in any one off costs such as a large payment for a replacement item or maintenance repairs to your premises that you are aware of
- Plan regular budget reviews
- Put aside an emergency budget for when needed
With the right approach to creating a budget for your business it is possible to budget in for the rising energy costs, however there is support available for small businesses and solutions for saving energy to reduce these bills.
How to save on energy costs during winter?
There are several steps you can take, as a small business owner, to reduce your energy consumption and thus save money on your energy bills this winter. We have touched on several of these tips in previous blogs, which you can read here. Alternatively, for additional support, please do not hesitate to get in touch with our customer service team, who can support you during this time.
Support available to SMEs
Currently, there are a number of schemes and grants available via both the government and the energy suppliers for small businesses. These schemes have been designed for those businesses who can not afford to cover the rising costs of their energy bills. regulator , Ofgem, has further information about the various types of support available on their website.
Guidance on the current Energy Bill Relief Scheme, provided by the government can be found here, and on our blog.