Rising energy bills could see around half of SMEs stagnate, decline or close in the next year but many advisers have said despite this they are in a good position to run their business as usual.
According to the Federation of Small Businesses (FSB), it is estimated that a typical business in London, with a 30kWh annual consumption, would see the cost of its annual electricity bill increase from £4,700 to £21,200 – with their gas bill jumping from £1,350 to £7,050.
In addition to this, the FSB’s latest data revealed that 1,800 companies across England and Wales registered for insolvency in July, with many being forced to close their doors due to simply not being able to keep up with rising costs.
One adviser, David Penney, director at Penney, Rudy Winter, tweeted: “Energy bill used to be £150 pm and he agreed to increase it to £250 pm.
“EDF then took £347, despite me being > £400 in credit. Now got it back down to £278.”
Penney also tweeted a screenshot from his office landlord which said: “Our specialist utility team currently estimates gas to rise by 463 per cent and electricity to rise by 224 per cent.
“These figures however are subject to change moving forward due to the ever evolving situation.”
However, Philip Milton, chartered wealth manager at Philip J Milton & Company, said: “The bills will indeed have a big effect but fortunately we are well capitalised to take it on the chin.
“Our solar panelling suddenly becomes ever more valuable of course as we save that much more. Our electricity rate has been suggested to go from around 26pu to £1.06pu and the standing charges per day are rocketing too.”
Despite being financially stable, Milton said the industry will be “adversely affected” as the majority of its fees come from a pot of capital which is either static or down since January yet the overhead costs - including salaries which are expected to rise to help employees with their costs of living - are up.
Earlier this month, prime minister Liz Truss told the Commons that the average household will have their annual energy bills frozen at a maximum of £2,500 for two years.
Energy companies will be capped on the amount they can charge per unit of energy used, though the details of this have not yet been announced and it will likely still mean an increase for many.
Speaking to FTAdviser, Milton said he also has a small hotel which has seen energy costs rocket.
“The bills have gone-up three fold already and we had already just been hit by the restriction on the use of red diesel as well,” he said.
Milton has invested in £45,000 of solar this summer and argued that this has helped.
“However, prices of accommodation will have to rise if energy prices stick at these daft levels,” he said.