Business

The Cost Of Living Impact On Small Businesses

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We all are unaffected by the current price of living crisis and its effects on our family’s financial situation. The rising energy cost, ongoing war in Ukraine, soaring taxes, and inflation are all factors in our current economic climate.

Businesses always feel the squeeze to a degree, and the living cost crisis (sometimes called “the cost of doing business‘) forces suppliers to raise prices, and customers have to cut their budgets.

Small Businesses and the Cost of living crisis

Small Businesses

Our 5.5 million small-scale businesses are the foundation of the UK economy. They account for nearly 99% of the small-scale business community. Although incredibly flexible, resilient, and resourceful, they face many challenges, including more often with price increases than their bigger counterparts.

Indeed, research from Novuna Business Finance suggests that an overwhelming 92% of small-sized businesses are concerned about how the cost of living expenses will impact their business. Most are worried about how their company will be able to absorb the additional fees caused by rising energy costs, supplier price increases, and increasing worker wages, with 38% of businesses feeling they cannot transmit these expenses to the customer.

What are alternatives if you’re not willing to raise your costs? What other options can you adjust to the rising cost of living?

1.    Scrutinise your spending

It may appear like a simple option; however, examining your expenditure is an excellent approach to finding the areas in which you can save cash. For instance, are you paying for subscriptions that are no longer required? Do you have the energy to add efficiency to the office you are in? You could cut the cost of operating or shift to a less expensive, local provider (which will likely save you cash in the cost of shipping and imports and reduce the carbon footprint! ).

2.    Encourage hybrid or remote working

Many businesses believe that”hybrid working” is the way of the future. It can aid in cutting energy consumption in the workplace while also encouraging the healthiest work-life balance of your employees, thereby increasing their productivity while reducing commute costs. If this is a feasible option for your business is worth considering, then it’s worth looking into.

3.    Use technology to your advantage

Technological solutions can assist you in solving any problem you may have, From payroll, accounting management, bookkeeping and HR to creating content, social media, and many more. Check out how you can streamline your procedures and help them be efficient and more cost-effective by automation using the use of digital software.

4.    Reward your customers

When purchasing is at a trough, and customers are not spending as much, rewarding them with loyalty points can provide a fantastic incentive to bring them back to your shop. The store may consider trying an incentive program, rewards scheme, or payment scheme to let customers spread out the costs of their purchases.

5.    Make use of government support

The Energy Bill Relief Scheme is in place in place up to the close of March, and the government has recently announced that it is preparing to launch the Energy Bills Discount Scheme will be in place in April and will run through March 2024. To learn more about the scheme, go to the official website.

If you’d like additional advice or help with your company and its finances, or need information on online bookkeeping software, contact us today in contact with our accountants. We offer various Accounting services for businesses that can be tailored to meet the requirements of your business.

Muhammad Mubeen Hassan

Hi. I am Muhammad Mubeen Hassan. I am SEO Expat and WordPress Websites Developer &  Blogger. 30 years old. I help entrepreneurs become go-to in their industry. And, I like helping the next one in line. You can follow my journey on my blog, for list Click Here If you need any post so you can email me on my this Email: mubeenh782@gmail.com  

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