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How can my business manage a cost of living crisis?

How can my business manage a cost of living crisis?
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How can my business manage a cost of living crisis?
Siobhan Stirling - Sharp Minds Communications for Capital Space by Siobhan Stirling - Sharp Minds Communications for Capital Space
Owner/Director - Sharp Minds Communications Ltd

Navigating the current cost-of-living crisis as an SME owner can be a worrying prospect. It’s likely you have anxiety about your business’ future and how you are going to balance the books. There are, however, some strategies you can implement to maximise the chances of your business coming through the current crisis.

Be bold with your pricing

According to a survey conducted by the British Chambers of Commerce , 73% of businesses are increasing their prices to combat rising material and running costs. Of course, most customers will understand the increase but don’t panic if others aren’t so happy. Increasing your prices will actually keep you in line with the current trend so no need to fear the (minimal) backlash.

Review your current outgoings

Reviewing your expenses is one way you can avoid increasing your prices. In doing so, you can see where you could cut your businesses’ spending. The best pace to start is with a spending audit. Review every outgoing, from the smallest to the largest and assess it’s value and whether a cheaper alternative is available.

To switch or not to switch

Keeping an eye out for any new offers in case you find a cheaper energy deal is always a good idea. However, look closely at any new terms as you may be better off sticking with your current provider.

Alternatively, your business could find ways to produce their own energy and invest in more green energy. This could, in the long run, save you thousands of pounds and means you’ll be self-reliant too! There is an endless range of greener, cheaper options for energy: solar panels, air source heat pumps, biomass boilers, wind turbines and more. To purchase solar panels, for example, could have a big impact on your businesses cash flow, therefore, you could perhaps look at some different finance options .

SME Funding

A solid route to go down could be commercial finance, especially if your goals are to boost cash flow or funding for growth plans. Depending on your long term goals, you can use a business loan to aid your cash flow or if you’re looking to purchase a new piece of machinery or technology to improve your efficiency, then asset finance is the way to go.

Invest in new talent and training

The UK has a shortage of workers and, to get new recruits, businesses face strong competition but finding someone to complete your team can mean your entire workforce is at full capacity and productivity. Finding the right person can lead to more strain on cash flow, however, the inclusion of a new team member should lead to your team being far more effective and efficient. With that extra person, more work can be completed and there is less of a stress on the rest of the team, which allows them to focus on the main tasks needing to be prioritised.

If you’re unable to find the cash flow to take on new employees, cash flow finance may be an option to explore. The funding can be sorted to help you meet payroll for the team and other day to day bills.

Staying proactive is the key to survival in any economic downturn, especially for SMEs. Our flexible business accommodation allows directors to devote more time to running their businesses.