The cost of living crisis in the UK has seen the price of essential goods increase to an all-time high. Consumers are starting to think differently about how they spend their money, which is beginning to impact many small businesses. What can small businesses do to survive this financially challenging time? This guide will offer some advice, covering topics like small business loans and energy efficiency. By taking the necessary precautions, your small business does not have to fall victim to this challenging time.
Small UK Businesses Survive the Cost of Living
Cut Down On Unnecessary Expenses
All small businesses must take the time to re-evaluate their expenses. By looking carefully at their finances, they will often find plenty of unnecessary costs they can cut back on. For example, if staff lunches are a regular occurrence, you may need to say goodbye to them – until you can get your business back on track. Cutting back on expenses does not need to become a permanent change. However, it will help your company remain financially stable during this difficult time. Ideally, business owners will also need to track their spending over the coming months – to ensure that they are not straying over their budget. For this, you can use a business expense tracker app. You can download an expense tracker online.
Do Not Kick Marketing To The Side
The cost of living crisis has sent many businesses into a panic. As a result, they start cutting back on the expenses they need to survive. Marketing is an area of business operations that can often get overlooked. It costs a lot of money. However, it is vital for the success of your business and helps to promote your products/services to others. So, if you start neglecting marketing, how will your customers be informed of any upcoming product releases? Some may assume that your business has closed down. Rather than eliminating marketing altogether, your small business can look into more cost-effective techniques. Social media is a powerful tool and one that is free to use. Start using digital marketing companies to promote your business and stay in contact with your customers.
Lower Your Energy Usage
Unfortunately, the cost of living crisis has seen the price of energy bills soar to an all-time high. If there is one thing that all businesses use in abundance, it is energy. You may have noticed that your bills have increased dramatically, which can be very worrying. Rather than making your staff sit in a room without the lights on, there are some other effective energy-efficiency measures that you can put in place. For example, avoid leaving appliances on standby. Even when your devices are left on standby, they are still drawing out a small amount of energy which will affect the price of your monthly bills. You should also inform your team to switch off lights and devices in unused rooms and don’t hesitate to invest in energy-efficient equipment. You can find some of the best energy-efficient appliances by referring to some online reviews.
Look Back At Your Business Plan
When was the last time you looked at your business plan? Now that the world is changing for most people, your original strategies and goals may need amending. Don’t hesitate to revisit your business plan and determine how you will adapt to the cost of living crisis. Think about your target customers. Their needs and wants have most likely changed. How can your business accommodate that? Your business plan should require detailed financial plans of your business. You can look at areas that may need a financial restructure and work out ways in which you will achieve this. If you need help amending your business plan, look online for some guidance. You will find plenty of business plan examples from which you can seek inspiration from.
Apply For Small Business Loans
Some small businesses may struggle to secure enough funding to help them through this challenging period. If that is the case, you may need to consider applying for small business loans. Although the thought of a loan can be daunting, it is a quick financing solution – that can give your company the funds it needs to get by. There are plenty of small business loans that you can explore, like an unsecured business loan. This allows you to access quick funding – without the need to offer any of your business assets. If you would like to know more about small business loans, Capalona is a company that can help. They specialise in helping plenty of small UK businesses acquire the necessary funds. They can take away the hassle of application and talk you through your funding options.
Raise Prices If Your Business Is Struggling
Although it can be a daunting feeling to raise your product prices, it is necessary if you want your business to survive. Some business owners may worry that increasing prices will frustrate customers and encourage them to shop elsewhere. However, there is a way to approach it sensitively. If your business deals with clients, you can choose to be open and honest with them about the price increase. Explain why you are doing it and thank them for their loyalty if they choose to remain loyal to your business. The cost of living crisis is affecting many people around the UK. Although price increases are not ideal, you may find that most people are understanding of the situation.
Focus On Retaining Your Staff
Every business needs a strong team of professionals behind it. Therefore, it is important that you focus on retaining your staff. Losing vital staff members at this crucial time can damage your business. Not to mention, recruiting and training new members of staff costs money. You need to create a desirable workplace culture in order to retain your staff. Offer employee perks that will help them get through this difficult time. For example, if some team members are struggling to pay their bills on time, offer to pay them early. It is small gestures like these that will consolidate their loyalty to your organisation. Now, more than ever, employees need support from their workplaces. Creating an environment where people feel safe and respected is the key to success.
Speak To An Accountant
If you are struggling to get your business expenses under control, consider talking to an accountant. They can help you see your finances from a different perspective. Remember, they are experts in this field of work, so they may be able to offer you some valuable advice that will help you avoid a difficult financial situation further down the line. Hiring an accountant does cost money. You can also utilise accounting apps if you do not currently have the funds for this. You can find plenty of these apps through a quick online search. They help you keep track of your finances – so you can manage accounting and budgeting while on the go. Some of these apps may require a little fee. However, it will be much cheaper than hiring an accountant.
Consider A Remote Working Model
The remote working model has taken the country by storm over the past few years. Statistics show that roughly 70% of UK professionals have worked remotely since 2020. There are many benefits of moving your business to a remote working model. Firstly, your small business will no longer require office space. You can save a lot of money on rent and energy bills. It also helps your employees too. Your team no longer have to commute to work, saving them money on public transport and fuel. Moving to a remote working model can be temporary. Some of your team may feel unnerved by the concept, but you can reassure them that it is not permanent. If your employees work remotely, you must supply them with the right equipment to help them do their job. Communication software is a worthy money investment as it will help your team stay connected.
Liaise With Suppliers
Like fuel and energy prices, suppliers are also increasing their costs to cope with the cost of living crisis. As a result, your small business may start to struggle. Rather than accepting these rising costs for what they are, small business owners must put themselves first. Don’t hesitate to liaise with other suppliers to see if you can keep your costs low. To get a good deal, you will need to be a confident negotiator. Don’t be afraid to push for the price that you want. The worst thing that can happen is the supplier says no to your requests.
Summary
Small business loans, remote working models, and price increases are all factors that will help small businesses survive during the UK cost of living crisis. Small business owners should try to keep their costs low and avoid going ahead with any plans to scale – until they feel they are financially secure.
