Giving small and micro-businesses a fairer deal on energy

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smesales@utilita.co.uk

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Powering the UK High Street

Powering the UK high street

Powering the UK High Street Report

17 The results are in…

Survey lays bare the energy

supply challenges faced by

small businesses

11 Brewing up a storm

Case study: Powering the

Nousha Lounge to high street

success

19 A little bit about us

The Utilita journey and why

fairness is at the heart of

everything we do

2018

Contents Our Values

2018 Foreword

Case study

Statistics

The survey

Key findings

About Utilita

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Utilita Energy Limited, Secure House, Moorside Road, Winchester, Hampshire, SO23 7RX

Registered in England & Wales No: 04849181 Regulated by Ofgem

Powering the UK High Street 2018

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Our ValuesTrust

Excellence

Supportive

Agility

We do what we say we will do We treat our customers, our staff, our partners and our suppliers fairly

Fairness

Boldness

Smart

Respect

We strive for performance excellence in all that we do

We dare to challenge accepted practice to do things better

We provide stimulating, rewarding jobs and career development opportunities for staff in a nurturing culture

We will continue to invest in technology to develop smarter and better ways of serving our customers

We strive to respond quickly and effectively to opportunities and challenges within our internal and external environments

We treat our customers, staff, partners, suppliers and the communities in which we operate with respect based on honesty and integrity

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Last year our micro-businesses generated £552 billion in sales and employed about 4.1 million people. It might be an oft-repeated phrase, but these small companies really are the backbone of the British economy.

Not only that, they are intrinsic to the health of our local communities, playing an important role in the lives of many. Millions of our hairdressers, cafes, pubs, restaurants, convenience stores and favourite little trinket shops are owned and operated by only a handful of people – sometimes just one.

These micro-businesses are born out of passion and entrepreneurial spirit, and are driven by hardworking, ambitious people.But they depend on their energy supply, whether to keep the fridges going, the hair-dryers blowing, the lights on or the tills ringing, and when we commissioned our second survey of these sectors in 2018, we found that micro-businesses are still getting a raw deal.

More than half say they are getting an unfair deal when it comes to energy, with more than 53 per cent of those surveyed paying at least £250 just to secure their energy supply and some more than £2,000 – that’s before being charged for any energy usage. More than a quarter are turned down flat for energy supply and more than half said that the credit rating for their business affected their ability to access certain goods and services.

Of all the challenges small businesses are facing – lack of consumer confidence, late payments and eye-watering business rates – we maintain that getting a fair deal for energy shouldn’t be one of them.

That’s why we’re committed to giving you what we believe to be the best deal available for your business.

Utilita is one of Britain’s fastest growing independent energy suppliers, and we now support more than 18,000 commercial customers across Great Britain. We were the first to challenge the ‘Big 6’ in the domestic smart pay-as-you-go energy market, growing from just four people sat around a desk with a single phone, to nearly 1,900 staff in Eastleigh, Sheffield, Glasgow, Essex, Chesterfield and beyond.

So we can look you in the eye. Because we have been there ourselves.

We are proud to support Britain’s small businesses in these times of uncertainty, and we believe customers should not be asked to pay crippling upfront fees or be put on a painfully high tariff. That’s why we offer flexible payment options – Pay As You Go, Pay On Receipt and Direct Debit - and do not charge deposits.

Should you face cash flow issues we will switch you onto a Pay As You Go smart meter solution and roll up your current bill so you keep your energy supply and can carry on trading. We can even help improve your credit rating at the same time.

Utilita was founded on the simple principle of giving all its customers a fair deal, and this is how we will help our businesses move forward. We’re committed to helping ‘power the high street’.

2018 Forewordfrom Bill Bullen, Utilita CEO

‘We are proud to support Britain’s small businesses in these times of uncertainty, and we believe customers should not be asked to pay crippling upfront fees or be put on a painfully high tariff.’

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Jassu Randhawa opened Nousha Lounge, her independent café bar specialising in hand-roasted gourmet coffees, cocktails and cakes baked on the premises, in the summer of 2017, in a Southampton residential suburb.

She quickly established it as a popular social hub with a distinct niche that holds its own against nearby high street chains.

Customers are drawn in throughout the day and evening by a varied, imaginative offer that extends far beyond its high-end menu, offering a delicious selection of hot beverages, alcoholic drinks and exclusively baked and beautifully hand-decorated cakes and brownies by Biggies Bakery.

Jassu knew that it was vital to strike a chord with the local community as the quiet area has no tourists, workers or business visitors and residents would make up almost all footfall.

A warm welcoming vibe was created by a series of varied, imaginative attractions, such as adult colouring book sessions, games nights, cocktail classes and a book club. In addition, all staff have been recruited locally, so there are strong bonds with their families and friends.

Distinctive mood lighting and music enhanced the appeal and Nousha Lounge is now a vibrant neighbourhood focal point, where friends gather and local interest groups hold their meetings.

With the hospitality sector hallmarked by tight margins and high risks; the cost of energy having a potentially make-or-break impact on any business that relies on coffee roasting machines, cooking facilities and refrigeration; and an uncertain wider economic outlook at start-up, the young entrepreneur wanted no obstacles or additional costs from suppliers - including her energy provider

Jassu said: “I was aware that many firms demand upfront deposits and credit checks from business customers, both of which are entirely unacceptable to me. I couldn’t tie up valuable capital like that and didn’t want my commercial goals thwarted or delayed by needless red tape – or the risk of paying a higher tariff because somebody I’d never met wasn’t happy with my credit score.

“Cash and time are both far too valuable to a new business to be careless with them and with that in mind, I also sought the lowest possible rates and the ability to keep an eye on energy usage, for budgeting and to identify possible savings.”As a result, the go-ahead barista shopped around for the best deal, one that was transparent and fair.

The Utilita Business Energy smart meter fixed tariff has proved ideal. Like all Utilita contracts, it demands no cash up front or background checks; offers the most competitive rates and comes with no hidden terms and conditions.

It all adds up to a major boost to Nousha Lounge’s competitive advantage. If power costs were higher, they would make it harder for Jassu to source premium ingredients and cope with the recently-introduced sugar tax. She has also been highly impressed with Utilita’s reaction times and security of supply: “A power outage was resolved in five minutes. The quick turnaround was absolutely crucial for me because I simply cannot be without power for much longer than that as it affects my ability to generate revenue almost instantly.”

Case StudyPowering Nousha Lounge’s competitive advantage

Micro-businesses in the UKStatisticsThere were 5.7 million private sector businesses in the UK in 2017, with an estimated 96% of these being micro-businesses who represent a large proportion of business growth across the UK since the year 2000.

Micro-businesses are defined as having between one and nine members of staff, with the majority of growth since 2000 due to sole traders with a self-employed owner, which accounted for 89% of the overall increase, according to the Federation of Small Businesses.

Ofgem defines a microbusiness as a non-domestic customer that meets at least one of the following criteria:

The number of businesses employing at least one other person has increased by 41,000 since 2016, to 1.3 million in 2017, and the number of sole proprietary businesses by 155,000 to 4.3 million non-employing businesses.

76% of businesses did not employ anyone aside from the owner(s).These, then, make up and continue to shape the diverse and dynamic micro-business community.

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2018Powering the UK high street

+ It employs fewer than ten employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million

+ It consumes no more than 100,000 kWh of electricity a year

+ It consumes no more than 293,000 kWh of gas a year

96% estimated microbusinesses 76% businesses which did not employ anyone aside from the owner(s)

+41,000 increase

+155,000 increase

2016 2017

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The SurveyCarried by CensuswideOur second annual Powering the UK High Street survey was carried out by Censuswide, the independent survey consultants. It questioned 1,000 micro-businesses in ten regions of the UK, with a randomly selected representative sample across a variety of sectors.

Among the businesses taking part were cafes, pubs, restaurants, hairdressers, convenience stores and other retail outlets.

Findings were analysed regionally, nationally and by sector. The 15 questions and the national results are as follows:

11Do you think your current energy provider gives you a fair deal?

How many hours a week do you spend on business admin tasks? i.e. paying bills, accounting tasks, employee management, etc.

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What kind of tariff are you on? Does the time you spend on business admin prevent you from driving your business forward?

What have you done to lower the cost of running your business?

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How often do you shop around for the best energy deal for your business?

Do you have plans to invest in your business in 2018? i.e. with new technology, staff, equipment, etc?

Have you ever been caught out with unexpected terms and conditions or costs when signing a new energy deal – if so, what were they?

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What concerns you in relation to the future success of your business?

If you are not planning to invest, what is the biggest reason?

Has the current credit rating for your business affected your ability to access certain goods and services?

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How much has your energy bill changed in the last year?

If you have been asked to make an upfront deposit by an energy supplier, how much was it?

How many hours on average do you work in a week running your business?

Have you ever faced any of the following situations with gas and electricity providers?

+ I have been asked to make large, upfront payments because I am a small business/ seen as a credit risk.

+ I have been put on a high tariff because I’m seen as a credit risk. + I have been refused an energy deal because I am a small business. + I have been cut off because I missed a payment.

2018

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Powering the UK high street

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Key findingsSmall businesses still being treated unfairly

Productivity suffers as small businesses spend months each year on admin

Poor cashflow is stopping small businesses investing

Businesses aren’t shopping around for the best deal often enough

Energy firms charging small businesses unnecessary up-front deposits

More than half (51%) of micro-businesses still believe they get an unfair deal on energy, up from 42% in 2017.

Less than half (42%) shop around for a better energy deal every year, with almost a quarter (23%) looking once every three years or more.

On average, micro-business owners work over 45 hours a week, with more than a third working over 50 hours a week.

Hard work and long hours should go towards the success of your business, not just to pay higher energy costs. 74% of small businesses spend up to ten hours per week on admin, that’s 65 working days a year. Less than one in ten (9%) use cloud technology or apps to help them with admin.

More than a quarter (26%) have been turned down flat for energy supply, with figures up from one in five (21%) in our 2017 survey.

More than half (52%) of respondents said that credit rating for their business affected their ability to access certain goods and services.

Almost three quarters (72%) of small businesses have seen the cost of their energy supply rise by up to £500 per year, more than double the increase seen last year, at £215.

More than half of those surveyed (53%) have paid at least £250 just to secure their energy supply.Our survey findings also show the average deposit is much higher at £649, with some businesses even paying over £2,000 before being charged for any energy usage.

We will give you our fairest deal and we won’t charge you a higher tariff because of your credit score.

Our fair deal promise and transparent fixed term pricing help put you in control of your energy costs.

Our smart meter technology and app means you can manage your energy on the go, putting you back in control so you can focus on making your business a success.

We will never turn down a small business just because of a credit score.

With our payment options, your credit rating could actually improve.

We are confident we can offer you a fair deal and we’ll provide you with a smart meter to put you in control. Come and talk to us.

We won’t ask you for a security deposit.

To counter the rising costs of energy and unfair deals, almost a fifth (19%) of small businesses are reducing staff hours.

We help you control your energy costs so that you can plan with confidence.

31% cite poor cashflow due to reduced consumer spending and increasing overheads as the reason for not investing.

More than a third (35%) do not plan to invest in their business.

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2018Powering the UK high street

About UtilitaEstablished in 2003Utilita is a gas and electricity supplier operating in the commercial and domestic markets in towns and communities throughout the UK.

Rated by Which? as a Top 5 Energy Supplier for Customer Satisfaction 2018 and ‘One to Watch’ on The Sunday Times 100 Best Companies To Work For 2018 list, Utilita has 675,000 customers – including 18,000 commercial ones - and employs close to 1,900 people.

Formed with the simple goal of giving Britain’s hard-pressed households a better, fairer energy deal, Utilita estimates that since 2010 it has saved customers about £500m.

Specialising in smart energy, Utilita uses the latest technology to allow households and companies to monitor and manage their energy usage and spend.Ten years ago, Utilita installed Britain’s first ever smart meter and more than 90 per cent of its customers have one installed – the highest figure for any energy supplier in Britain.

Committed to tackling fuel poverty, Utilita believes the cheapest and greenest energy is the energy you never use. Its aim is to always keep things simple: Utilita upholds a fair price, offers an easy-to-understand product and provides complete transparency with its service offering.

While offering a simple Smart Pay As You Go tariff has been a cornerstone of the business, Utilita has also launched its FLEXIPAY initiative, allowing commercial and domestic customers to pay by Direct Debit,

On Receipt or Pay As You Go. Three ways to pay, but one simple tariff.Although the business was established in Hampshire, where its head office is located, Utilita has enjoyed rapid growth over the past ten years and now operates from centres across the UK in Colchester, Sheffield, Chesterfield, Warrington, Newcastle and Glasgow.

It recently opened its first high street energy store in Gosport, Hants, with further plans to open a string of similar shops across the country.

The company was the first supplier in the UK to install a

smart meter.