Issue #66 - Price cap recap ♻
Essential price cap info (no cap on business energy) | Is business energy different to domestic? | How is energy bought & sold? Does it affect prices? | Small business tutorials | Tunes | Words | More
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Essential energy info for households and businesses 💡
Welcome to Issue #66 of The Backbone - the fortnightly newsletter from Bionic.
Ofgem has announced that the energy price cap will drop by about 7% from October this year, to reflect the drop in wholesale energy prices (the amount your supplier pays for the energy it then sells to you).
So, we thought now would be a good time to run over a few price cap misconceptions, to make sure you’re not caught short by the changes.
Here goes…
There is no price cap on business energy - If you have a non-domestic energy contract, the price cap won’t affect your bills - even if you work from home. Business energy rates have never been capped in the same way as domestic rates. The only support on offer is via the Energy Bills Discount Scheme (fun fact - gas and electricity rates haven’t once hit the threshold since the scheme kicked off, meaning no one has had a discount). It still makes sense to compare quotes to see if a fixed-rate contract is cheaper than your supplier’s standard variable rate.
Energy rates are capped, not energy bills - The headline figures are that the price cap will be cut from £2,074 a year to £1,923 a year. But that figure is based upon the average usage of a household paying by Direct Debit. If you use more than average and/or pay a different way, then you’ll pay more than that figure. Remember, it’s the unit rates and standing charges that are capped, not the annual bills.
Standing charges have gone up - Although unit rates have been cut by the new price cap, standing charges have gone up slightly. The standing charge is a fixed daily rate (regardless of how much energy you use) that is used to cover the costs associated with keeping your property connected to the energy network.
Increased standing charges have seen bills rocket for some business owners. Suppliers have increased standing charges significantly for some businesses due to an Ofgem initiative called Targeted Charging Review (TCR). You can find out more in our guide to business energy standing charges.
And here’s a reminder of how the Energy Bills Discount Scheme works 👇
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Is business energy different to domestic energy? 🏭
Although it comes from the same sources – and possibly the same supplier – there are some key differences between business energy and household energy. This means that comparing and switching business energy isn’t quite as simple as switching household energy. And this is why it often makes sense to let a business energy broker do the heavy lifting.
How is energy bought & sold? Does it affect prices? 📊
Ever wondered why the price you pay for energy doesn’t seem to quite tally with rising and falling wholesale prices? Or why renewable energy is just as expensive as non-renewable energy? A lot of it has to do with how energy is bought and sold. Here’s all you need to know.
🗣 SHOUTOUT
#BionicBusinessStory - Lunya 🦐
Bionic sat down with Peter Kinsella who runs the popular Spanish eatery Lunya with his wife Elaine. We found out how he started the business, what his preferred marketing technique is and what his top advice is for fellow SME owners.
Bionic: What was the inspiration behind your business?
Peter Kinsella: I used to run a management consultancy in health and social care and was over in Barcelona for the first time doing some work with a charity there. They took me out to lunch and that sowed a seed. I was knocked out by how sensational the lunch was. We didn’t go to a fancy restaurant, it was a spit and sawdust type café, but I still remember the dish; it was chickpeas and Pigs trotters. It doesn’t sound appealing, but it was glorious!
B: How do you keep your business fresh?
PK: For a restaurant, it’s a really hard balance. If we’d had the same menu for 14 years, we wouldn’t be as popular as we are today. But you can’t get rid of your most popular, bestselling more profitable dishes either. We change our menus two or three times a year. There are some things that stay the same. For example, we’re never not going to have our patatas bravas or our calamari, we may tweak those dishes but they’re the ones that can never go.
B: How do you juggle a heavy workload as a business owner?
PK: You have to be willing to do everything, no matter how hard it is, how tired you are or how challenging it is. In the beginning, I was the person who unblocked the toilets, changed a fuse in a light plug and dealt with the IT problems.
B: What is your best piece of advice for fellow business owners?
PK: Be so careful. You can be doing well - plenty of people coming in and enjoying the food - but you could be running out of money so quickly. But my more general piece of advice is no matter how terrifying something sounds and how much of a risk, it’s important to give it a go. But go in incredibly well prepared. I’m able to respond quite quickly because I’ve done so much thinking and planning beforehand. It’s so important.
B: What’s your most successful form of marketing?
PK: The best thing we ever did was give every person who dined with us a little feedback form. We’d ask them to tell us how we’d done and give their email if they chose to, that would get them 10% off in the deli.
We got 58000 email addresses in 14 years, which is fantastic for a small business and so, roughly once every week we send emails to the best part of 60,000 people, people who know and love us, and that is the best marketing we do.
Read more of Peter and Elaine in our customer story - Liverpool gets a taste of Spain from Lunya
📚 FACTS
Did you know…there are loads of free online training courses that can help you with all aspects of running your business? Here’s a round-up of some to look out for in September 👇
💪 Building a sustainable business - Tuesday, September 5
💷 How to find and apply for government grants - Thursday, September 7
📈 How to fund a small business - Wednesday, September 13
🎥 How to make videos that get sales - Wednesday, September 20
👾 Introduction to cyber security - Thursday, September 21 (£40)
🦾 BIONIC
Bionic - the business price comparison experts - compares a range of business essentials to help you save time, money, and hassle.
Our tech-enabled team will answer all your questions in simple terms, and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
Bionic tuk tuk the hassle out of switching energy for this business owner 🦾
Check out more ⭐⭐⭐⭐⭐ Trustpilot reviews
🎧 LISTEN
Playlist 🎶
The weather is just starting to show the first signs of autumn, which obviously means some easy-listening is in order. Departure Lounge @L’aperitivo with Roy features Shack, Air, Steely Dan, Nenneh Cherry, Al Green, Hall and Oates, Michael Kiwanuka, and loads more - best enjoyed with a cold glass of sparkling Perrier water.
Podcast 🎙
Headway is a podcast aimed at disruptors and anyone who wants to change our perceptions of the world and the way we work, interact, and collaborate with each other. There’s a big focus on how we can improve mental health through tech and innovation, but it also touches on topics as wide-ranging as industrial fishing and the colonial history of coffee. Imogen Aylwin hosts, and guests include charity managers, tech CEOs, founders of non-profits and everyone in between.
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