- 48 percent of small businesses do not monitor their energy spend
- 50 percent are on extended contracts and risk paying more
An online tool enabling small businesses across Australia to see if they are paying too much for energy was announced by the Australian Government today, in partnership with Xero and Alphabeta.
The Small Business Energy Check, checkyourenergyspend.com.au, is built on a statistical model that uses data from Xero Small Business Insights (Xero SBI), which aggregates and anonymises energy-spend information from hundreds of thousands of Australian businesses.
The benchmarking tool which enables small businesses to compare their energy costs against each other was announced by Minister for Energy and Emissions Reduction, Angus Taylor MP. It was launched along with a one-to-one energy advice service. Both free services comprise the Government’s Business Energy Advice Program (BEAP).
A survey by AlphaBeta of 300 small businesses, as part of the development of the tool, found that 48 percent of businesses surveyed did not actively monitor their energy spend and 50 percent of businesses were on extended contracts and risked paying more than needed.
The Small Business Energy Check is designed for owners and their advisors, who have up to 20 full-time employees. The online tool does not collect or ask for any identifiable data.
“It is vital for small businesses to have access to real life examples of how other businesses are tackling their costs and accurate data to help them benchmark their performance. This tool will enable them to assess energy spend as a percentage of revenue as well as compare their energy spend, across industries and regions throughout Australia,” Trent Innes, Xero Managing Director said.
“I urge small businesses to make the check, and also draw on the expertise of their accountants and bookkeepers, to take action to find a better deal, save money and achieve greater energy efficiency, with the help of the BEAP experts,” Mr Innes said.
Dr Andrew Charlton, AlphaBeta Director, said the Small Business Energy Check provided a simple solution for small businesses that would help drive meaningful change.
“Small business owners already carry a heavy workload and this comparison tool now enables them to outsource an important element of understanding if they are paying more than they should be,” Dr Charlton said.
“We carried out extensive analysis and testing with small businesses across Australia in designing and developing the tool. Having a solution that is funded by the Government and independent of any energy retailers was viewed favourably with the businesses that were involved with our research.
“The ACCC found that remaining on a contract for an extended period, significantly increases the risk that a business is paying more than necessary for energy. Over 50 percent of businesses told us they had either been on contracts for longer than three years or were not sure,” Dr Charlton concluded.
Rebecca Yazbek, co-owner of Nomad restaurant in Surry Hills, Sydney said energy costs were something their business needed to keep a careful eye on.
“Our energy costs have gone up over the last five years, so it’s definitely something we keep a watch of,” Ms Yazbek said.
“Having the tools to better understand your energy bill and get expert advice about reducing energy costs will definitely help a lot of small businesses, particularly those in the hospitality sector where costs for rent, wages and energy can be high.”
Technology companies and innovative start-ups will also benefit, with an aggregated sample data-set, used for the online tool, being made available to developers to drive innovation in the sector. The first of three Innovation Workshops was held in Sydney following the launch, with further sessions scheduled for Perth and Melbourne.