SME News & Tips 5 Sept 2016

Saving SMEs from toxic deals

Small business owners can often be an easy target for brokers and other third-party intermediaries, especially within the energy industry. Many business owners may have been burnt in the past by brokers fluctuating prices concealed in complex, self-serving information. As a result, business owners could possibly find themselves forking out hefty sums of money to cover surprise hidden costs that they were not made aware of.

Not only is this frustrating and costly for small business owners, but in worst cases, it could lead to debt and profit loss.

So, how can businesses protect themselves from toxic deals?

Stand your ground

Earlier this year, the Competition and Markets Authority (CMA) claimed that small businesses could have saved a collective £230 million a year simply by switching. With this in mind, SMEs may feel pressured into accepting a deal that may not be right for them in the long run just to get a short, sharp saving. As a result, business owners could end up paying a lot more than they should (or expected).

Small business owners need to be cautious, assertive and firm, while not feeling afraid to ask questions before signing on the dotted line.

Do your research

It doesn’t hurt to take the time to check and compare prices with other suppliers. Not only does it further inform business owners of what other deals are out there, it can also mean that an additional cost saving could be made.

This includes keeping an eye out for broker commission hikes hidden in the small print. Unfortunately, brokers aren’t free and many SMEs often find themselves left short.

By researching beforehand and gathering as much information as possible, SMEs will be able to make an informed decision and not be swayed by over zealous brokers.

Shop around; it may go a long way.

Don’t be afraid to switch

Many business owners assume that switching energy providers is time consuming and a lengthy process that could incur extra costs. However, the CMA has recently implemented new guidelines to ensure that energy suppliers and brokers offer transparent, unbiased and digestible information, stripping away any complexity – there is also no costs added for switching.