A friend asked me to read out her studio’s electricity bill last month, which is a strange favour to be asked for and I said yes anyway. She had spent the summer muttering about the meter in the hallway, convinced that turning things off was saving her real money. Two weeks with the lights off and the heater unplugged got her four pounds. Four pounds, on a shop open five days a week. She was quiet for a minute, then asked me why the number barely moved, and that question is what this post is about.
What changed on 1 October
The energy price cap went up again at the start of October. Ofgem set it at £1,723 a year for a typical household using both gas and electricity, up from £1,663, which is about a four per cent rise. The regulator announced it back in August. You have probably seen the number in a headline and moved on, which is fair. Cap headlines are written for households, and if you run a small business, the household story is not quite your story.
Here is the uncomfortable part. That headline assumes a typical amount of energy use, and I promise you your premises are not typical, nobody’s are, the word typical in energy pricing is doing a lot of quiet stretching. A workshop full of machinery swallows far more than a two bedroom house. A beauty room, or a small design studio with a kettle and a few lights, uses a fraction of one. So the average figure tells you roughly nothing about your bill. And if you run one of those quieter units, this particular rise bites in a place most owners never think to look.
The standing charge is the quiet half of the bill
Every meter bill has two halves. The unit rate charges you for every kilowatt hour you burn. The standing charge is a flat daily fee you pay whether the building is full of people or locked up for a fortnight. It covers the cost of keeping the supply connected, and suppliers set it themselves within the cap rules.
On a domestic bill the standing charge is a few tens of pounds a quarter, easy to miss. On a business tariff it can run to several hundred a year, and for a small unit that barely draws power that flat fee is the majority of what you pay. You can watch it happen: turn everything off for a month, the bill barely shifts, and there is the fixed layer sitting underneath like a receipt you cannot throw away. Most owners never think about it because nobody advertises it. Worse, the suppliers competing hardest on unit rates are often the ones recovering their margin on the standing charge, so switchers who only read the rate figures can end up paying more than they did before they switched, which is a sentence nobody enjoys reading twice.
So the four per cent headline is a blunt tool. What matters is how your particular split of unit rate and standing charge has moved. Some businesses will see their whole bill climb. Others, mostly the low-use ones, will notice that the increase is sitting almost entirely in the fixed part, which is a different problem with a different fix.
What to actually check before January
The next cap review lands at the end of November and covers the new year. Between now and then is the window where this is cheap to fix, because the numbers are fresh and your supplier expects you to call.
Pull your last three bills and put the standing charge and the unit rate into two separate columns. Cannot find them? Ring your supplier and ask for both in writing. Once they are written down you can compare.
Then check which tariff your business is actually on. If you never chose one deliberately, you may be on a default or out-of-contract rate that nobody signed up for with their eyes open. Small businesses on half-decent metering can often get their usage profiled properly in an afternoon, and the profile matters more than the postcode when you compare deals.
If the numbers come out ugly, you have options. A fixed contract through the winter prices the risk out, which is worth money if the forward market stays jumpy. Comparing standing charges across business suppliers takes an hour of dull spreadsheet work and pays for itself the first time the fixed layer is cut in half. And if you are on a half-hourly or smart-metered site, you can shift what you can off the peak without changing anything else.
I should be honest that none of this is a marketing job. But here is what keeps it on this blog: the money sitting in a small business’s fixed overheads is usually the same money the marketing budget never got. When owners tell me a relaunch or an ad test is not in the budget this year, the room is nearly always being eaten by fixed costs, not by the ideas.
If the maths feels tedious, that is normal. Dull numbers are the whole game here, and a supplier who does not compete on fixed fees is counting on your dislike of spreadsheets. If the job lands on you, do the two columns first and look at the standing charge before the unit rate. That single swap in attention is what turns a £1,723 headline into a real number for your own premises.
Getting your overheads in order frees up budget for everything else you have been meaning to do, including your marketing. If you want a second pair of eyes on the customer acquisition side of the ledger, talk to us, and if you want to see how your marketing spend stacks up against the competition, our guide to SEO costs is a good place to start.
