Small businesses have limited time and resources to negotiate their utility contracts, which is why the process must be kept cheap and simple. Almost a third of small businesses highlight the cost of utilities as a barrier to growth. Customer service, choice, technology and support are also important factors.
A number of utility markets are under scrutiny by the government and regulators. Many of the issues under investigation stem from the same basic problem: small businesses are poorly understood by service providers, caught between the needs of domestic customers and the requirements of big industry.
We want to see small and micro businesses treated more like domestic consumers. Nowhere is this more relevant than in the energy market. Here the FSB is calling for published tariffs for businesses, regulation of brokers and an end to automatic contract rollovers.
However, it is also important to understand how the needs of small businesses differ from those of domestic consumers. For example, plans for the rollout of energy smart meters are focused on the domestic sector, with an assumption that the needs of small businesses can be extrapolated from this. They can’t.
It isn’t just the energy sector. The introduction of competition into the retail water market must not repeat the mistakes made in the energy market. Clear contracts, easy switching, regulation of brokers, accurate billing and innovation and technology (such as smart meters) will be critical.
John Allan, national chairman, Federation of Small Businesses