New figures from uSwitchforBusiness show that while average business turnover has fallen by over 6%, energy bills have risen by over 60%.
The numbers from BIS show that between 2010 and 2011, average business turnover fell from £716,309.49 to £671,960.36, while our stats show the average business energy bill rose by 60% from £2,130.28 to £3,408.89.
This means that business energy costs now represent 0.51% of an average business’s turnover. It might not sound like much, but it’s a 70% increase on 2010, when it was just 0.3%.
Our sister site uSwitch.com, has noticed a similar trend in domestic energy prices: the cost of household energy has grown five times faster than the average salary since 2004.
Why? Well, the economic crisis explains declining turnover, and rising wholesale energy prices have a big part to play in rising energy prices.
James Constant, director at uSwitchforBusiness.com, commented: “Historically, businesses could afford to ignore energy costs, because they seemed almost negligible in relation to their profits. But with costs having leapt up from 0.3% to 0.51% of turnover in just one year, this is no longer the case.
“Furthermore, if this trend continues, energy costs may soon hit 1% of total business revenues, a hugely concerning figure that should force businesses into acting fast.
“No one is in a position to accurately predict the market right now, but anyone responsible for energy should certainly ensure that they are as prepared as possible for what is to come. Businesses should therefore be sensible and think about cutting and offsetting costs when they have the opportunity. Switching suppliers, or even just your tariff, can save a business an average of £946 a year.”
And while that £946 saving won’t quite wipe out the £1,278.61 rise we saw between 2010 and 2011, it will still make a big difference to your balance sheet.