Don’t let your bottom line suffer because of these oversights
Monday, April 8, 2019/
Your profit margin is based on a pretty simple formula, so when it comes to improving your bottom line you have three choices: increase revenue, decrease expenses, or find a way to do both.
Of course, this is where things can start to get a lot more complicated – but the good news is, with energy, telco and other service providers all competing for your business, bundling your services and staying on top of contract end dates are easy ways to maximise savings and discounts and cut your operating costs.
In fact, you may not even need to wait until your contract is up to get onto a better deal.
Energy providers often use the word “contract” when setting you up on a gas or electricity plan, so it’s natural to assume signing on means you’re tied to the same provider until the end of the stated term.
But it’s important to remember that what they’re really locking you into is the offer, not the service, and you could be free to take your business elsewhere if you find a better deal.
“I think a lot of people get mistaken on the energy side – they talk about ‘contracts’ and a lot of people don’t realise that they’re not contracts like you might have on other services, they’re only contracts on the offer or discount that you’re receiving,” says Daniel Kelly, General Manager Business Products and Marketing at Vocus Group, which owns Commander, a small business specialist telco provider.
“You could leave your energy provider any time without penalties – in fact, there might be more to be gained by moving when it comes to energy , especially if you are bundling with other services.”
Don’t ‘set and forget’
Have you recently assessed your telco and internet provider’s plan to see how it stacks up against the competition? Do you know when your current contract expires, or if it’s already expired?
It may seem a minor concern, but it’s a conversation that financial planner Cameron Howlett, principal and founder of Independent Wealth Partners, regularly has with his clients.
“What a lot of the companies do is they’ll lock you into, say, a 12-month deal where you pay by direct debit and you get a 30-35% discount,” he says. “But at the end of that 12-month period you just roll into a new agreement, which isn’t as good.”
Upgrading your service could allow your take advantage of faster internet speeds or a bigger data allowance to better suit your business needs, or you may be able to bundle your phone, internet and mobile for more savings and simplicity.
And while Howlett knows from personal experience that it’s easy to let your contract end date slip by unnoticed, remember the longer you let it go, the longer you’re potentially paying more than you need to.
“I’ve even fallen into a trap with our personal telephones where I’ve realised there was a period of about four months where I was actually paying an extra $30 a month on my phone because I forgot about it,” he says, “so, you’ve got to make sure you’re on to it – set yourself a reminder on your phone.”
Get the best for your business
You don’t always have to chop and change to get on a better rate or service offering. If you try talking to your current provider about your business’s specific needs, they may be able to work with you to help boost your bottom dollar.
“Never be shy to have a conversation with your provider – and it’s not about threatening to leave, it’s just talking to them about your business,” Kelly says. “Where it’s electricity or another service, it should be a constant negotiation – so if you are a high energy user, for example, you may be able to negotiate a better price.”
Waiting for someone to call you with an offer gives them the upper hand, he adds, so don’t be afraid to take the initiative. Just make sure you do some market research first to increase your bargaining power.
“I’m not fearful of it to be honest, because when I look at Commander’s services they’re highly competitive and we do offer more discounts and benefits when you have more with us,” Kelly says. “So, for us, it’s actually something we’re quite open to – our size allows us some flexibility in those areas.”