There are many factors to consider when choosing a business premises: size, location, cost etc. One other aspect, which will make a big difference to ongoing running costs to the business is energy efficiency.
1. Ask the agent if there is an EPC (Energy Performance Certificate) for the premises. This will show you how energy efficient, and therefore how cost effective, the building will be to run. A is the most efficient, with G being the least. The EPC shows how efficient the building is, and how efficient it could be if measures were taken to make it more energy efficient.
2. Other useful questions to ask at this stage are:
- Are utilities included in the lease?
- If not, can you see how much the previous tenant’s bills were?
- Who is responsible for maintenance? (this is often the tenant)
- How old is the boiler (if relevant)?
3. Check the lighting and ask whether LEDs are installed. Older style fluorescents use 60% more energy than LEDs. If they are not installed, see if the landlord will do it before you move in, or add it to your priority list.
4. Once you’ve agreed on the premises, it is likely that you will need to set up utility contracts. These are slightly different for businesses than domestic contracts.
With both gas and electricity, a climate charge levy is applied to business contracts. At the time of writing, this is 0.847p per kWh for electricity and 0.406p per kWh for gas. A feed-in tariff of 0.594p per kWh is also charged on electricity. Some suppliers will include this in the base rate, some will not, so it is really important to check this when comparing rates.
Like the domestic bills, both having standing charges applied, normally a daily rate but sometimes it can be a monthly standing charge.
VAT is normally charged at 20%. However, keeping your bills low has a double benefit, if you use less than 4,397 kWh of gas per month or 1,000 kWh of electricity, this will count as low usage and only 5% VAT will be applied to the bill (and no Climate Charge Levy) applied. This saving makes it worth considering checking everything is as energy efficient as possible.
The most important piece of advice about energy contracts is to do your own homework. Make sure you get three different quotes, and don’t just use an energy broker, ring suppliers yourself. That way you can ensure you are getting the best deal for your business. We come across far too many businesses who have signed up to long, expensive contracts because they did not focus on this aspect.
5. Once you are in, make sure you take meter readings immediately, and it is worth taking them every month unless you have a smart meter. Do not rely on estimated bills, as businesses can be caught out with a large catch up bill at some stage.
6. Make sure you start as you plan to continue. Do not leave equipment on standby overnight, label light switches, share month on month energy usage with staff and train them to be energy conscience to keep overheads low.
7. Finally, why not ask the Business Energy Efficiency Project (BEEP) at Durham County Council to come and carry out an energy audit for you. It is fully funded and once you have compiled your first’s year accounts, we can probably provide you with a grant towards any energy efficiency work.