Everyone is feeling the stress of higher costs, especially around wintertime. But with the looming fear of recession around the corner, it’s not just our homes that we will have to worry about, but our jobs, which is especially true for those who are self-employed and own small businesses in the UK. But how will higher energy costs affect small businesses this winter?
Why are small businesses worried about electricity expenses?
Businesses and firms have been faced with incredible challenges like the 424% rise in gas costs and the 349% increase in electricity since February 2021, as seen by data taken from the Federation of Small Businesses (FSB). With these outstanding increases in basic utilities, there is no surprise businesses are worried about going under this winter. The FSB have also reported that over half (53%) of firms are expected to collapse, shrink or at best, stagnate over the next year causing a domino effect that will create “a generation of lost businesses, jobs and potential”, and there are warnings of the humanitarian crisis that will be caused this winter solely by fuel poverty.
There have been warnings that small business owners could face energy bills higher than their mortgage repayments and due to all the rising costs, fewer customers will be able to afford to go out to eat and drink. The Morning Advertiser said around 70 percent of pubs will go bust this winter without support. With the lack of help and regulatory caps from the UK government, there will be little aid for small businesses this winter.
How to get help if you are a struggling business
If you find your business in extreme debt due to rising costs, then consider looking at alternative options to receive help. Here are three ways to gain some help as a small business this winter.
First, take the step to reach out to your provider to discuss a repayment plan for your energy bills. Once on the phone, you can ask for:
● a review of your payments and debt repayments
● payment breaks or reductions
● more time to pay
● access to hardship funds
If this proves to be uneventful, and you are still looking for ways to get a break from your energy bills then consider looking for help from the Government, Charities, or Grants.
Are Small Businesses Headed Toward a Dead End?
The Energy Price crisis was met with the Energy Price guarantee which caps household energy bills at £2,500 and was recently extended by chancellor Jeremy Hunt for an additional 3 months until June, after originally being set to end in April. Extended or not, small businesses are worried when the program ends, they will reach a cliff edge and will have to drop their business because of the expenses. During this time, the expenses may go up 5x of what the business owner originally paid for common expenses like energy. With these expenses back on the shoulders of small businesses we could see many small businesses come to an end.
Conclusion
You may have some worries for your small businesses this winter, but you have the tools to improve the room in your budget. If you want to do more research into everyday savings you can contact us and speak with us about our money-saving products that can help reduce costs. Just call 0808 175 0270.
