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How are rising energy prices impacting your business?

Published On
7 August 2023
Category
Business tips & insights
Light bulb lies over an energy bill

As of July 2023, benchmark energy prices were set to increase by 20-25% in Queensland, New South Wales, Victoria, and South Australia. Whilst the focus of the energy cost crisis has primarily landed on households, the impact on small businesses should not be underestimated. Consumer advocates caution that prices for customers on expiring competitive deals could surge even more, and energy providers advise households to shop around for the best possible prices amidst these rising rates.

Rising energy prices can put immense personal and professional stress on your budgets, which may in turn lead to detrimental consequences for you and your business. Understanding this, Sole has partnered with CIMET, a utility management system that can be used to compare energy, internet, solar and mobile providers across Australia.

You may be all too familiar with how the energy crisis is impacting you at home, but the consequences for businesses are a little less clear. Read on to find out the ways the energy crisis may be impacting your business, and find out how Sole’s partnership with CIMET can help you out.

Increased Operating Expenses:

Higher energy prices directly impact a business’s operational costs, especially if the business heavily relies on energy-intensive processes or equipment. This can lead to reduced profit margins or increased prices for goods and services, which may negatively impact customer demand.

Reduced Profitability:

As energy costs rise, businesses may struggle to maintain the same level of profitability. The increase in expenses without a corresponding increase in revenue can lead to reduced net income and overall financial performance.

Competitive Disadvantage:

Impact on Production and Expansion Plans: Rising energy costs may force businesses to reconsider their production processes or expansion plans. Some may be hesitant to invest in energy-intensive projects, while others may need to scale back existing operations to control costs.

If energy costs rise disproportionately for a business compared to its competitors, it may face a competitive disadvantage in the market. Competitors with lower energy costs could offer products or services at lower prices, attracting customers away from the higher-cost business.

Employee Morale:

Businesses may need to implement cost-cutting measures, such as reducing employee benefits or laying off workers, to offset increased energy expenses. This can lead to decreased employee morale and productivity, affecting overall organizational performance.

Regulatory Compliance:

Rising energy costs may lead to increased scrutiny and regulation by authorities and environmental agencies, requiring businesses to comply with energy-saving and efficiency standards, which may involve additional costs and resources.

In summary, the impact of rising energy costs on a business depends on various factors, including the business’s size, sector, energy consumption patterns, and ability to adapt to changing market conditions. Those that can manage and mitigate the effects of increased energy costs will be better positioned to thrive in such challenging circumstances. Furthermore, some businesses may see rising energy costs as an opportunity to invest in renewable energy solutions, energy-efficient technologies, and innovative practices to reduce their long-term energy expenses and enhance their sustainability credentials. You can even check out this Sole blog for further tips from Sole on improving sustainability credentials!

So…how can Sole help?

At Sole, we understand the stress that rising energy costs can bring to both your personal life and your business. We have partnered with CIMET, where it’s never been simpler to switch energy providers and save. CIMET works by using your address and a few other details to search for and compare competitive utility deals best suited to you. Then, simply pick the plan that suits your needs and leave CIMET to manage the transfer with no fuss. You’ll end up with a great-value plan that doesn’t compromise on quality!

Still need more incentives? By using CIMET through Sole, you’ll receive a $30 gift card (for every service you switch) to welcome you! Find out more by heading to the CIMET x Sole partnership website.

Note: You can find CIMET’s T&C’s here.

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