The Australian government has worked with Xero and AlphaBeta to develop an online tool to let small businesses across Australia check if they are paying too much for energy.
The Small Business Energy Check 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 aggregated sample data-set used for the online tool will be made available to developers in technology companies and start-ups 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.
A survey by AlphaBeta of 300 small businesses, as part of the development of the tool, found that 48 per cent of businesses surveyed did not actively monitor their energy spend and 50 per cent 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,” said Trent Innes, Xero managing director.
“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.”
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,” he 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.”
According to Charlton, “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 per cent of businesses told us they had either been on contracts for longer than three years or were not sure.”
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,” 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.”