There is usually a lot of confusion about business electricity and gas supplies, especially when it comes to categorizing types of businesses. It’s worth noting that energy suppliers that deal with Utility Bidder are required to treat micro businesses a bit differently to other types of businesses. Therefore, if you own a micro business, then you need to know the energy tariffs available on the market. This article discusses the different types of micro business energy tariffs available on the market.
Understanding a micro business
Basically, if you run a very small business that has minimal employees and low business activities, you can consider it to be a micro business. Sometimes, most small partnerships or sole proprietors operate small business premises.
The differences in a micro-business and small business classification can often make a significant difference. Micro businesses are under the small businesses, which can be based on the number of staff within the operation.
A small business usually has a couple of workers, but to be considered as a micro-business you need to have less than 10 people. Therefore, if you are self-employed, a sole trader, or don’t have employees, then you own a micro business. Moreover, “if you know how to start and run business and willing to teach others, please check business studies teacher jobs“
Types of micro business tariffs
Today, most energy suppliers are offering a variety of energy tariffs for their business customers. Some business energy contracts are pretty similar to what is available for domestic customers, and you can find variable rate tariffs and fixed-rate tariffs.
The length of these energy contracts tend to vary, so you can find some that can last between one and three years. For small businesses with a tight budget, it makes sense to choose a fixed rate tariff because the unit price of the electricity and gas remains the same during the length of your contract. It can be easier to manage your energy bills if you know the exact amount you have to pay for your energy.
There is also a variable rate tariff that may be attractive, especially if you want to switch energy suppliers when wholesale energy prices are quite low. With a variable rate tariff, the price per unit of energy changes during the length of the energy contract depending on the market prices.
Therefore, you can save some cash on the energy costs if there is a decrease in the unit price of energy. But a unit price rate can also increase, so you can end up paying more for your energy.
Business and domestic energy customers need to pay standing charges for their energy. A standing charge refers to a fixed daily price that the energy supplier charges you for the meters and other equipment required to manage and supply your energy.
Regardless of the amount of energy your business utilizes, you still have to pay this standing charge. The good news is that some energy suppliers now offer a zero standing charge tariff, meaning you don’t need to pay a fee. This is a good development for micro businesses that have to operate with tight budgets.