We may be living through uncertain times, but that doesn’t have to affect your small business’ future. Follow our tips to navigate the cost-of-living crisis.
As we pass into the second half of 2023, the cost-of-living crisis shows no signs of abating. And if you run a business, you’re sure to have felt the strain.
Whether we like it or not, economic challenges are part and parcel of life as a small business owner. The most important thing you can do is be prepared and adapt when the need arises. So, here are a few steps we recommend to navigate the cost-of-living crisis.
1. Plan ahead
The key to success is staying one step ahead. But this isn’t quite as dramatic or complicated as it sounds. Make sure you, or your finance team, have pay reviews planned in advance to understand when you’ll need to scale up (or scale back).
Set revenue targets for best and worst case scenarios, and monitor them regularly, so changes never take you by surprise. And don’t forget to keep your team in the loop – we’re all experiencing the same challenges, so there’s no need to be coy.
2. Review employee contracts
No one likes having to let staff go, which is why it’s important to regularly take stock of your team. While some companies may be tempted to cut down their workforce for a quick financial fix, an internal review could be the difference between making an employee redundant, and dropping them down to a four-day week.
The cost-of-living crisis also doesn’t have to spell the end of your hiring efforts. Consider alternative routes, like using temporary workers or partnering with an agency.
3. Check eligibility for financial relief
The pandemic brought financial aid into the mainstream, and although we’re finally on the other side of it, many companies still desperately need economic relief.
If you’re a small business owner, you may be eligible for the UK’s Small Business Rates Relief. As the name suggests, this initiative reduces business rates for those that qualify, as well as providing access to government-backed loans and grants to help pull your business out of a financial rut.
Earlier this year, Parliament also unveiled their Energy Bills Discount Scheme, which will run until March 2024. Eligible businesses should have already seen a £6.97/MWh reduction to their gas bill, and a £19.61/MWh discount on their electricity, with financial aid automatically applied – though it’s worth double checking that your business has received this discount, as if not, you may need reimbursement.
4. Reduce your outgoings
Tough times means tough decisions. And if you’ve exhausted all of the options above, you may have to simply cut costs.
If you rent an office or other space, start by reviewing your energy supplier and seeing if you can find a better deal elsewhere. Once you’ve done that, consider your customer offering – if you run a restaurant, try reducing your menu items; if you sell handmade gifts, focus your efforts on a few bestsellers. And finally, as much as we hate to say it, it may be unavoidable to let staff members go.
Discuss your options with Nabarro Poole
Navigating a cost-of-living crisis is overwhelming, especially when you’re doing it by yourself. So if you’re not sure where to start, ask an expert for advice.
At Nabarro Poole, we’ve helped clients make tough financial decisions for over two decades. Get in touch today and talk through your options with our friendly, knowledgeable team.
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