And despite rising energy costs, 14% of small firms have never tried to switch providers, say researchers
Over half of small business owners have no idea how much they spend on their utility bills, according to a new survey.
Research by Utilitywise, an energy and water consultancy, found that 52% of the UK’s 2.5million small businesses have no grasp of how much of their overheads gas, electricity and water account for, while a third of SME owners are unable to access data showing how much energy they use.
More than half of small business owners delegated the management of utilities to other staff, such as their office manager, with only 17% of those surveyed saying that they managed them themselves, while 11% admitted they had no idea who in their business looked after their utilities services.
Despite the fact that rising energy and water prices are still the main cause of rising costs for 54% of small businesses, 14% of SMEs – 684,469 firms across the UK – never review their utilities providers to see if they could get a better deal.
Most small business owners review their broadband, stationery and recruitment providers more often than they review their utilities services, while nearly 70% admit they do not understand the difference between a fixed and a flexible energy contract.
In a survey earlier this year by the Federation of Small Businesses, 81% of members said that energy providers didn’t care about their needs, while two-thirds of small firms said they believed it was difficult to switch suppliers. Those who had tried to do so complained of unclear notice periods, complex contract terms and said that the process took too long.
“Our study shows there is a lot of confusion about utilities amongst small businesses,” said Utilitywise’s sales director Michael Dent. “Misinformation and misunderstanding mean small businesses are suffering because they don’t know how to navigate the utilities markets nor have the levels of consumption necessary to negotiate better prices.
“Poor buying and management of utilities stops growth and damages businesses’ bottom lines.”
The firm has launched a new service called the Utilitywise Energy Alliance which combines the collective buying power of small firms to enable them to get better energy and water deals.
Heightened awareness of corporate sustainability is leading many businesses to make major changes to their core value systems. They are no longer pursuing old models of mass production and consumption, with profit as the single goal. Companies today are being forced to reconsider their roles in the economy, in human societies, and in the environment. Anticipating these changing roles, companies are seeking innovations that challenge previous value systems.
The UN World Summit on Sustainable Development (WSSD) in Johannesburg, 2002 adopted a concept of the three pillars of sustainability: environmental sustainability, economic sustainability, and social responsibility.
Eco-Sustainability
Environmental innovations, also called “eco-innovations”, seek to use technology and science in balance with nature. Such eco-innovations as low emission vehicles, energy saving appliances and compact fluorescent light bulbs permeate everyday life. Consumer awareness of environmental issues has led to the immense popularity of eco-friendly products and this popularity is reinforced by the promise of saving money while protecting the environment. The economic benefits of eco-innovative products are very easy to assess. A business’ long term success may hinge on the company’s ability to position itself as environmentally responsible and an eco-innovator.
Economic Initiatives
Innovations in economic and social sustainability often grow out of answering the fundamental needs of communities. And often grow out of severe social injustice and economic impoverishment. Market opportunities for social innovations are not often as easily defined, and often their profit potential is underrated, thus there are fewer examples of successful economic and social innovations to point to.
One example of a social and economic innovation is the micro-financing phenomenon Grameen Bank which began, in 1976, issuing small loans to the impoverished without requiring collateral using a group borrowing model that uses peer pressure to ensure repayment. The Grameen model resulted in 98% of loans going to women in the community raising women’s economic outlook in the poor nation. Grameen Bank and its founder, Mohammed Yunus, were jointly awarded a Nobel Peace Prize in 2006 for their work developing the economy from the bottom up. Today Grameen bank is largely owned by the collection of borrowers as shareholders.
Since the advent of the internet age, and with the apparent success of Grameen, other micro-financing entities have grown. Now individuals all over the world can make an investment loan through microventures.com, microplace.com and kiva.org, just to name a few. Anyone can lend as little as $25 to an individual that may be able to make a substantial difference in their lives for a very small amount.
Social Strides
Another organization that is making great strides in societal innovation is Ushahidi, a not-for-profit organization in Kenya which creates open-source software and tools. Ushahidi is dedicated to the democratization of information, societal transparency and lowering the barriers for individuals to share their stories.
The organization began in response to the media blackout put in place after the 2008 Kenyan elections. It was difficult for citizens to find any information about the riots. Ushahidi developed open-source software that would collect information posted by the public via SMS, email and internet, and then represent that information on a map. The software was developed so that anyone using it would be able to learn what was happening and where.
Since it was developed in response to unrest following the Kenyan elections, Ushahidi has found popular use in other countries where the free flow of information is curtailed. Its use has expanded, and Ushahidi has been very effective in gathering information on the ground during natural disasters such as the earthquakes in Haiti and Japan. There is the potential for commercial applications as well.
Initiatives in service of social or economic change would not, in the past, have been considered economically profitable. Today, however, those initiatives are succeeding at anticipating social needs and changes in consumer awareness and becoming commercially successful. Sustainable companies of the future will need to balance economic profitability with environmental and societal responsibility, and be ready to innovate to respond to the changing global world.
Culled from Reuters
