Monday, 03 October 2022 15:55

How Can Businesses Navigate The Cost of the Living Crisis

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The cost of living is a topic on everybody’s mind as of late.

Prices are rising in a host of areas (such as food, fuel and electricity) and it’s not just the everyday household being affected; businesses both big and small are starting to consider how and where they can save money without sacrificing the quality of their products and services. The good news is that there are ways that your business can alleviate the pressures of higher costs - and here’s a look at just 3.

3 ways to minimise the impact of the living crises on your business

1. Know your finances

It’s easy to keep the scary thoughts of rising inflation on the periphery, but one of the best things a business can do is sit down and take stock of their finances. After all, the way your business has been functioning recently isn’t likely to see you through harder times.

Take a look at your projected cashflows, current profit and loss, break-even and stress calculations and balance sheet calculations. Do these align with your current financial situation? Identify where you can make beneficial changes and implement the strategies you need to stay out of the red.

2. Assess your overheads

Once you have a good grasp of your finances, it’s time to assess your overheads. The living crises won’t discriminate, so you could find that you are spending more on certain aspects than you were previously. Take a look at contracts for things like raw materials and see where you could potentially negotiate.

One of the biggest outgoings right now is fuel, so finding ways to cut back on this is especially important if you have staff that drive. Getting a fuel card could be worthwhile, as it’s an alternative payment method for drivers that lets business owners track expenditure, file expenses and even limit usage. As you can get these from several providers, be sure to compare fuel cards to get the best deal.

3. Update your prices

You may be reluctant to increase your pricing amid a cost of living crisis, but there’s no sense in losing out and potentially putting your business at risk. Your competitors will be doing the same, and as you’ll likely already know, being competitive can be just as important as offering great products. It can be worthwhile to reach out to your customers and explain your reasons for price increases, while maintaining a focus on the quality and value of your brand.

Will these points really help?

Overall, it’s the little things that will all add up, so any steps you take to navigate the soaring costs of your business are likely to be beneficial in the long run.

 
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