How family-run businesses can face the energy price hike and win

Is anyone else tired of seeing negative news surrounding energy, it's become draining as more questions than answers are being dumped into the laps of UK citizens.

A quick recap of what's happened: the price suppliers had to pay for gas soared but due to Ofgem's price cap in the UK that left many providers having to sell their gas to customers for less than they were buying it from suppliers. This is an untenable position for any business and has resulted in lots of suppliers going bust and leaving customers in limbo.

In this article, we will update you about energy in 2022, talk through the impacts this has on family-run businesses and finally, answer the question on everyone's lips "What can I do about it?"

Latest energy update in 2022

Together Energy has become the latest casualty as a result of the surge in gas prices, making it the 27th, yes 27th, supplier to go bust in the last 12 months alone! This means their 176,000 UK customers are in a familiar position to so many of us - confused, worried and left in limbo.

As suppliers continue to struggle or go bust but it is the British public who are picking up the bill - with some energy customers seeing as much as a 50% increase in their energy costs. The biggest concern is Ofgem's next two price cap changes - in April and October, with experts up and down the country forecasting a dramatic increase in both! These price cap changes could see energy costs go from today's price of £1,277 per year to a staggering £2,240 per year, according to experts' models.

The government is "looking into" how they can alleviate the price spikes and support people through the energy crisis but in all honesty, we believe that Boris Johnson and his party currently have higher priorities and would therefore advise you to take the initiative yourself but don't worry we've got some ways how you can do that later in this article.

How does it impact family-run businesses?

Family-run businesses have a much different culture to big, multi-national companies and this difference will mean these price spikes will have greater impacts. Local and family businesses often mean the owners are much more involved in the day-to-day running, they're 'in the trenches' and therefore can see the impact more directly - it is common for this to lead to greater stress for them individually.

Big corporate companies are run by people hired by the owners and this results in a disconnect of emotions, however, family-run business owners are so fortunate with the buck stopping at them! This means they have to be more budget-conscious because spending more on one aspect of the business has consequences for another, but vice-versa is also true as savings in areas such as energy consumption would allow for more money to help fuel (pun intended) the business' growth!

The biggest and most fundamental impact is the fact it is a family-run business, meaning the next generation will likely inherit the business and continue the legacy, making it essential for the current owner to leave the business in a better place than they found it. The current environmental situation means the handover between this generations' owner and the next is pivotal as not only are energy prices rising but so are global temperature, making the energy decisions today evermore important for those who inherit the next stage of a family business - switching to a clean and renewable energy source like solar could be the greatest gift to future family members, both in costs but also in living conditions.

This sense of stewardship through the generations is where the magic lies for families in business together and this should be protected - It is quite literally in the family!

What can I do about it?

But wait! It's not all doom and gloom because you can take back control and manage your costs by being smart about your energy. The UK has been in a fortunate position for decades, whereby as citizens we haven't had to worry too much about our energy supply and the associated costs because they've been automatic for us. That's changing, due to factors such as the current energy market but also as humankind moves towards renewable energy, so as we feel the squeeze from suppliers and markets we have the opportunity to make positive changes.

Here's what you can do to manage your energy costs and establish control:

Educate yourself on the situation by reading articles like this to understand what is going on
Read the contract you have with your current supplier, switching supplier or source may be what is required so understanding your contractual obligations is key
Be transparent with your team. If your family-run business has employees then highlight the situation to increase awareness for energy-efficient behaviours like turning unused lights off
Reduce your costs and be more energy-efficient with simple changes - switch bulbs to LEDs, turn your thermostat down by 1 degree and turn unused equipment off including lights
Switch your energy source rather than your supplier - moving over to renewables like solar is the best way to lower and future-proof your energy costs.

To give you an insight into how much you could reduce your energy costs - by running a 30kWp solar system in the optimal position, often facing south you would save between £2700-£5400 per year dependant on production circa, but imagine, what would your business do with that saving?