How to Prepare Your Business for Rising Costs
As everything from energy bills to National Insurance costs continue to rise, it’s time for small businesses to take a good look at their financial activity and identify any areas that can be made more cost-effective. In this quick guide, we’re sharing a few ways to reduce your costs and run a more profitable business.
Should I increase my prices?
This is a question we’re being asked a lot at the moment, as an increase in the cost of living has a knock-on effect across the wider UK economy. Due to small business owners paying more each month, it often makes sense to increase their own prices in line with inflation and other changes.
However, increasing your prices is a factor not to be taken lightly, as it could result in some long-term customers looking elsewhere for a better deal. If you don’t want to up your prices, or at least not at the moment, the following tips should prove useful.
Keep track of your expenditure
You’d be surprised how many business owners don’t truly know how much they spend through their business each month. Either that or they haven’t looked into more affordable alternatives, as chances are there will be someone who can offer the same quality of product or service for a lower price. This applies to everything from energy, commercial insurance and software systems to printing, stationery and even supplies for your staff kitchen.
By investing a few hours into searching for more affordable suppliers, you could potentially cut your monthly costs by a significant amount. In the process, you may also start a working relationship with a supplier that’s more aligned with your own company’s ethos, such as one that takes environmental responsibility very seriously or offers greater levels of customer service than your current provider.
Budget and forecast to full effect
Whilst budgeting involves setting clear costs on a monthly basis for the rest of the year, which will allow you to keep on track of your finances and not fall into debt, forecasting is the creation of in-depth reports that show whether the business is where it should be and how to move in the right direction.
Together, budgeting and forecasting enable business owners to traverse the many obstacles and difficult circumstances that may arise, ensuring greater control over your day-to-day operations, monthly cash flow management and long-term business growth.
This is all much easier said than done, which is why the business advisors here at TreyBridge Accountants are available to help you budget and forecast in a way that will benefit your business today, next month and long into the future.
Always be prepared
The last few years have really shown us how much things can change. From the aftermath of Brexit to the COVID-19 pandemic and the Russia-Ukraine war, none of us could have predicted what was in store and how it would affect supply chains, the price of commodities and utilities, and the availability of labour.
Whilst it’s impossible to guess what will come next, it is possible to always be prepared for the worst-case scenario. This approach contains many elements, such as having a backup plan for slow months, maintaining financial reserves for emergencies, and constantly keeping a finger on the pulse of industry changes. This is a mighty task, which is why our team is available to support you either on an ad hoc or long-term basis.
We’ll help you to lower your costs
If you’re interested in reducing your costs and running a more profitable business, call our Northern office on 01482 235575, our London office on 0207 885 0605 or fill in the contact form below.
Tagged as: Accountancy Tips & Advice
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