Small businesses have faced a lot over the last few years. The pandemic meant that tens of thousands of businesses had to temporarily close down, and now the cost of living crisis has caused further uncertainty. As both inflation and bills rise, many business owners are looking for solutions to help keep them afloat.
If you are a small business owner, it is likely you are already feeling the pressure caused by the cost of living crisis.
Here’s everything you need to know about how the cost of living crisis is affecting small businesses – as well as what you can do to weather the storm.
1. How The Cost Of Living Crisis Is Affecting Small Businesses: Rising Energy Costs
Rising energy costs are a major concern for most small business owners, especially if they use commercial space (such as a shop or an office). Bills have risen significantly; in fact, some small business owners have reported that their energy bills have increased by 250%. This is a concerning increase, and a recent study found that two out of five business owners are worried about this.
So this is a significant expense, but thankfully the government have recently released a plan to help cut costs for small business owners. This is called the Energy Bill Relief Scheme, and you can find out more about how this can help your business by clicking here.
2. Rising Fuel Costs
Rising fuel costs are also an issue for businesses. Fuel costs in Britain reached a record high in 2022, and while prices are dropping slightly now they are still very expensive.
This is a big issue for businesses who directly transport or deliver products, but in reality all businesses will feel the effects of the rising prices. This is because customers, supply chains and employees are also being affected.
If you are worried about rising costs, we have some tips to help you stay afloat. Read on to find out more.
How to Keep a Healthy Cash Flow
One of the best ways to ensure your business survives the cost of living crisis is by keeping a healthy cash flow. This is especially true if you are a start up without backup funds to tide you over.
Three things you can do to maintain a positive cash flow are;
- Review your business expenses. Could you find a cheaper energy supplier? Could you downsize your commercial space? Does your product supplier offer any discounts? Is it an option to work from home?
- Look at funding options. Is your business eligible for government or council funding? Are there any local funding programmes you can take advantage of?
- Consider repricing your services. Are you using the best possible pricing model for your business? Do your prices reflect current inflation?
- Consider outsourcing instead of hiring in-office staff. Outsourcing certain tasks (such as bookkeeping, marketing, social media and general admin) is a great way to grow your business without overspending on full-time staff. If you think this could help your business, click here to find out how we can help you with this!
It may be a difficult time for small business owners, but it is possible to weather the storm. Take some time to assess your business costs, and look online to see if you are eligible for any government support. You can get through this!