Business Advice

British SMEs secure £511 million of supplier cost savings through the power of negotiation

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BARTERING for the best deal from suppliers saved Britain’s SMEs hundreds of millions of pounds last year, according to a new study.

The striking research, commissioned by npower Business and conducted by YouGov, showed that nearly half (45%) of British SMEs surveyed saved £10,000 or less in the past year by negotiating. This potentially resulted in impressive overall savings of £511million across the sector in the past 12 months.

However, despite the financial benefits, the research went on to show that three quarters of SMEs say they don’t negotiate with their suppliers and, in particular, 70% don’t negotiate with their energy supplier before agreeing to a contract. But 93% of the SMEs that do take the time to negotiate energy contracts say they see value in doing so.

In a bid to encourage SMEs to harness the power of negotiation, npower Business is launching a new campaign, led by the winner of the first series of BBC’s The Apprentice, Tim Campbell, to remind companies to negotiate their energy contracts and wider business costs to get the deals they deserve.

The campaign is offering a series of tips to businesses around how to get the most out of their negotiations, including the importance of research and planning ahead. More than half (59%) of decision makers surveyed that feel that their successful business negotiations have been due to being prepared and doing their research. Meanwhile, 46% believe this is because they are good at being flexible, allowing them to get a good deal.

Businessman and Apprentice winner Tim Campbell, who is fronting the campaign said: “Throughout my business career, I have always believed in the power of negotiation. It’s a vital skill that can make a huge difference to your business costs and importantly your profits. I am thrilled to be fronting this campaign to get across the message that polite, well-researched negotiation can help you get the perfect deal. Therefore, I’d recommend to pick up the phone today, and start negotiating.

Philip Scholes, Head of npower Business, said:This research shows that businesses across the UK are reaping the dividends of negotiating their supplier contracts. However, not all firms are entering discussions with their provider, which could prove to be a missed opportunity in the long term. That’s why we launched this campaign – we’d encourage all British businesses to look at their supplier costs, and particularly their annual energy costs, to help improve their bottom line.”

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