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Tips for Managing Your Business Overheads as Energy Prices Rise

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Tips for Managing Your Business Overheads as Energy Prices Rise

Recent months have seen energy prices soar to levels never before seen and this will, of course, have a knock-on effect on your business overheads.

 

As you’re probably aware, recent months have seen energy prices soar to levels never before seen and this will, of course, have a knock-on effect on your business overheads. In this article, we look at some steps that businesses can take to protect their bottom line in the face of soaring energy prices.

 

What’s going on in the energy market right now?

 

The rise in non-domestic energy prices has been driven by a number of global factors. The rising price of natural gas globally, diverged LNG shipments, inflation caused by Brexit, Covid-19, low wind production and the war in Ukraine have all contributed to soaring non-domestic energy prices in recent months.

Unfortunately this strain on energy supply is likely to persist, meaning businesses need to consider steps that they can take to lessen the pressure of soaring overheads. Government forecasts predict that the cost of energy will only continue to rise over the next decade, meaning that the volatile and sky-high prices we are seeing now are likely here to stay.

 

How can businesses protect their bottom line?

 

Businesses may need to be flexible with how they operate in order to combat soaring energy prices. For example, shifting operational hours minimally, perhaps by just a few hours, could allow your business to take advantage of lower rates by avoiding the need to pay extra for peak usage times. Flexible or Variable Rate contracts may allow you to take advantage of lower energy prices depending on the time of day at which you use your energy. (For example, 4-8pm is considered to be a peak time for energy consumption. During this period, you will pay the highest rate for your energy consumption, roughly 20-40% more than at other times of day.)

It is also vital that businesses make every effort to consume energy as efficiently as possible in order to control their overheads in the face of soaring prices. Cutting wasted energy helps to save money whilst also reducing your company’s carbon footprint. It may be helpful to implement an energy management system (EMS) in order to monitor your company’s energy consumption and identify the points at which energy is being wasted in order to combat this.

One of the easiest ways to reduce energy consumption, and therefore cost, is to optimise the way in which it is already being used. This means switching off lights and charging in rooms which are unoccupied, properly shutting down computers and other equipment after use and limiting the use of particularly energy-intensive machinery to only when it is absolutely necessary.

 

Voscap – Expert Business Recovery Specialists

 

If you fear that business overheads are rising at a rate that means your business is no longer profitable, you may wish to seek help from an expert business recovery specialist. Contact Voscap today on 020 7769 6831, or email help@voscap.co.uk, and we will happily discuss your options with you.

About Voscap Ltd

Voscap’s primary objective is to save your business! Our team of experts’ knowledge in restructuring and turnaround assignments is invaluable when assessing the best option available to your needs. With experience spanning several decades, we have the skill and resources to provide viable solutions within all industry sectors. All organisations go through difficult times and we are here to help. From small to multi-million turnover businesses, we have dealt with the most complex of cases. We offer an initial free assessment in analysing your financial position and providing clear and precise advice making your experience a simple non-complicated process. Get in touch →