With global economies hit by rising inflation, supply chain issues, and continuing uncertainty around the war in Ukraine, staying on top of your business’s finances isn’t easy at the moment.
Calculating costs, reviewing pricing, and managing budgets, will all be vying for your time. You could be getting to grips with new working methods too, with an increase in flexible staff and remote working.
Keep reading for five simple tips for managing the rising cost of living as a business owner.
1. Seek financial advice
The first thing to do during times of uncertainty is to speak to professionals. It might provide the peace of mind you need to reduce stress. Equally, you could get the help you need to address current issues and relieve pressure in the near future.
Being on top of your personal finances could be the key to your business’s success. Simple budgeting at home and a firm grasp of your disposable income could help you to re-evaluate your company’s performance.
At Boolers, we can help you to align your business and personal finances.
We do this by understanding the goals you have for each. We then create a plan that allows the two to work together.
This is especially important during periods of uncertainty, helping to give you confidence and a sense of control.
2. Revisit your supply chain and consider outsourcing
Well-publicised issues in global supply chains are causing problems across many industries. Shortages of materials and personnel have seen swimming pools close, car manufacturing slump, and crops rotting without the labour to harvest them.
Breaking down your supply chain, and researching the market, might help to uncover potential savings that reduce quality.
Maybe there are elements of the chain that you manage yourselves, like packaging or delivery. Could these be outsourced to cut back on costs? It could also relieve the pressure on that part of your business, allowing you to focus on other areas.
You might need to think long term to see the real benefits but handing over a part of your process to experts could make a real difference.
3. Conduct a pricing review and analyse your cost-effectiveness
With prices rising, you might need to think about increasing the amount your customers pay.
While price hikes can be risky, clear communication can help. If your costs have increased significantly – whether for fuel and energy or the components you use – you might be surprised at how many customers understand that some of this cost will be passed onto them.
Before you opt for this approach though, be sure to make sure your business is running as cost-effectively as possible. If savings can be made that mean you don’t need to increase prices, make these savings first.
4. Look at areas for savings: travel, going paperless, smart meters
Some areas where you might be able to cut costs include travel, office administration and energy bills.
A simple switch to a paperless office – if you have computer systems that can handle such a change – could cut down on printing costs. Reminders not to print emails unnecessarily, online tools for signing documents, or a computer-based approach to project management, could save money and streamline your processes.
Maybe you moved to video conferencing via Zoom or Microsoft Teams during the coronavirus pandemic? Identifying the benefits of these approaches could help you to save money on travelling for meetings.
With fuel costs rising across the UK, energy bills are on the rise too.
Consider a move to smart meters at home and work to help you become more energy-efficient. Also, encourage green habits like switching off lights and powering down computers rather than leaving them on standby.
5. Manage staff wellbeing to cut absence and turnover
A recent report from the London School of Economics (LSE) confirms that mental health problems cost the UK economy more than £118 billion each year.
While the cost of living crisis might have slowed the so-called “Great Resignation”, it will be increasing the money worries of your staff.
A recent YouGov poll, published by the Chartered Institute of Personnel and Development (CIPD), found that almost a fifth (19%) of employees believe that their employer is not doing enough to support their financial wellbeing. More than a quarter (28%) admit to money problems that affect their job performance
Pay, holiday entitlement, and your company’s flexible working policy could help to alleviate financial concerns.
You might also consider adding financial advice as a job perk, alongside the other financial and non-financial benefits you offer. This could help your employees to better manage their finances through the current crisis and help them to build toward a more stable financial future.
Get in touch
If you would like help managing your company’s finances as the cost of living rises, please contact us today.
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