Small businesses are a huge part of our world at Opus Energy, and we know it’s not always easy to find an energy deal that favours medium, small or even micro businesses.
One of the advantages of being a large company is that you have more time and resources to spend making sure you get your energy at the best deal possible – often buying directly from the wholesale market to take advantage of price fluctuations.
However the majority of small companies are time-poor (over half of SMEs cited time pressures as a barrier to growth in our recent small business survey) – and the less time or specialised expertise you have on your side, the more likely you are to settle for an energy deal that makes for a quick and easy decision rather than working to get what is truly best for your business.
That’s why basket deals can be a good solution to SME energy problems.
Why do SMEs need a new way to manage their energy?
A lot of small businesses purchase their energy as a domestic customer would – choosing a fixed price contract that they stick to for a certain amount of time, typically from one to three years. These contracts are good for budget management, but you could be losing out on heavy price drops if the market fluctuates. You may also have less product choice compared to those available to larger consumers.
What’s an energy basket deal?
The technical term is ‘group purchasing’, but you’ll often hear it casually referred to as a basket deal.
These deals allow SMEs to band together and collectively pool their buying power, gaining access to the pricing opportunities normally only available to large energy customers. So if you are a SME owner and have some fellow small business friends and can get access to a consultant who is hot on the wholesale energy market, you could take advantage of their knowledge and group together to try and get better savings.
Anything else I should know about basket deals?
Glad you asked.
There are two types of basket deal available – one in which you buy your energy in bulk at the start of your contract, and the other that allows you to buy small chunks of energy as you go along.
The first ‘fixed price’ type means you can lock down a cheap rate at the start for your group of SMEs in the ‘basket’; the second means that you can potentially save pennies from unpredictable market drops.
And does it work?
One such customer that Opus Energy has helped is the Brentwood Borough Council. Their basket is managed by Energycentric and provides energy for all sorts of SMEs in the local borough. Take it from them:
“Businesses are always looking for ways to manage costs and overheads better, so this scheme is a great alternative to the conventional way of buying energy and actively supports the army of SMEs that are vital to our borough.”
Councillor John Kerslake, Chair of the Performance and Resources Committee and spokesperson for finance and procurement at Brentwood Borough Council.
The best way to find out if group purchasing is right for you is to simply ask. Each SME group needs one designated point of contact, so make sure your spokesperson is clued up on the energy market and get proactive. You could be surprised by the benefits it can bring to your community.