How reducing energy costs can increase the value of your business
16 Apr 2012 | Filed under: Cost & Purchase Management
Posted by: Paul Foster
When many businesses can save more than 15% a year simply by switching to a cheaper energy provider but two-thirds fail to do so you have to ask why? …some are overpaying by as much as 40/45%!
But, based on only achieving a 15% saving – bear in mind that if you spend £100,000 per year on energy you would have to increase sales by £150,000 per annum – that is based on a net profit margin of 10% i.e £15,000 – to match what can easily be saved on gas and electricity and the mystery of business inertia deepens. Put another way, switching energy supplier could increase the value of your business by £75,000, (based on valuing the business at five time earnings/profit) but fewer than one-in-three businesses bother to do so.
If every business in the UK compared the energy prices once a year and switched when necessary, the combined savings would be around £2bn.
Sadly this is far from the case. Low switching rates are the result of a lack of knowledge about the range of prices and the fact that many would-be-switchers discover they’ve just been automatically tied into another contract by their supplier……… whether they like it or not.
Before it is too late for you, please contact paul.foster@auditel.co.uk to find out how we can help you save time and money.
