Consumers have responded to the present cost of living crisis in the UK by cutting down on spending and saving their money to tackle rising costs.
This has led to a stop in SME growth and a slowing of the recovery from the pandemic.
Many businesses are worrying about the future because of the ongoing uncertainty and the potential for long-term impacts.
As a result, what precautions can you take to protect your small business from the effects of the cost of living crisis?
One option is to increase pricing
Given the many price increases individuals are currently experiencing, this is probably not something you want to do.
However, if your company is experiencing significant financial difficulties, this may become inevitable.
If a price hike is unavoidable, doing it with as minimal impact as possible on your bottom line is the goal. Maintaining a competitive pricing point is essential to retaining a steady stream of customers in today’s market.
Perform accounting audits regularly
It is critical that you have a firm grasp of your costs and how they evolve over time. The results of financial audits should be reviewed on a frequent basis so that corrective measures may be taken before having a detrimental effect on the company.
Cost-cutting measures, such as eliminating or minimising wasteful spending, might be among the outcomes of your audit.
Use less energy
Increasing energy prices are now a major factor in overall cost increases.
In order to lower these costs, you should carefully consider measures to minimise your energy use, such as:
- Powering down machines while they’re not in use
- Investing in less power-hungry machinery
- Keeping machines on for shorter amounts of time
- Calling on your staff to do their bit by doing things like turning off lights when they leave for the day.
Try to find other options
It is recommended to look for alternative solutions if you don’t want to boost your pricing or if the aforementioned advice isn’t working for you.
Consider experimenting with less expensive materials so you can sell your items at a lower price.
But bear in mind, maintaining a high standard of quality in your work is essential to keeping happy customers while keeping costs down.
Is your small business struggling to cope with the rising cost of living? Reach out to us, contact us at firstname.lastname@example.org.