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Almost all small businesses have seen energy prices rise and are adopting strategies to cope, survey finds.
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Rising energy costs force SMEs to rethink how they operate
16 January 2023
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9 minute read
Nine out of 10 small businesses say rising energy costs over the past 12 months have forced them to change the way they operate, according to an online survey, while many are also coping with an unreliable supply that is hurting day-to-day operations.
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The survey of SMEs, by comparison website Software Advice, revealed how rising energy costs was forcing business owners to find ways of cutting back on usage to remain viable.
The majority of respondents said electricity price increases had impacted their business’s performance with 42 per cent saying that the impact was minimal but 39 per cent saying it was substantial.
Ninety-five per cent of respondents had seen a rise in electricity costs and of those, 43 per cent said prices had increased significantly and 40 per cent said they had slight increases but expected more.
Just 12 per cent said the cost of electricity had increased only slightly.
To try and cope with higher prices, 53 per cent of businesses had reduced energy consumption, 39 per cent said they had modified their processes to make them less power hungry, 25 per cent said that they had installed their own renewable energy system, 24 per cent said they fitted more efficient electrical systems, and 8 per cent said they stopped production in peak hours.
Unreliable supply was an issue with 42 per cent of respondents experiencing electricity outages in the past year and of those, more than half said there had been two to four outages, 22 per cent said five to 10 outages while 2 per cent had more than 10.
While 38 per cent of the respondents had not experienced any electricity cut-offs, 21 per cent were expecting them.
In terms of the outage duration, short-term cut-offs were the exception.
Nearly four in 10 said that the average outage was 30 minutes to an hour and 37 per cent said one hour to less than three hours. For a minority it was much longer, with 6 per cent experiencing electricity outages for three hours to less than six hours, and 1 per cent suffering average power cuts of six hours or more.
Just 17 per cent of those surveyed said outages lasted less than 30 minutes.
Software Advice said its survey results revealed that the majority of SMEs felt energy price increases impacted their company’s performance negatively. Many were adopting measures such as modifying processes or even stopping production to cope.
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