Seven tips for businesses during the cost of living crisis

For many business owners, no matter what size the business is, the current economic climate is causing concerns for the future. 

However, there are steps you can take to cut costs and ensure your business stays afloat. 

Keep reading to find out more. 

Reduce unnecessary costs 

During inflation, it is vital small business owners are mindful of their expenses. Reviewing where your money is going will help you to identify areas to make cuts on without compromising the quality and value of your services or products. For example you may be able to save money by switching to a less expensive supplier for office supplies or talking to your landlord to reduce your lease costs.

There may also be ways to cut costs without affecting your bottom, such as switching broadband providers or reducing your energy consumption. 

Negotiate better deals with suppliers

Negotiating better deals with suppliers and service providers is an effective way to cut costs and redirect funds to other areas. Getting quotes from multiple suppliers, as well as negotiating on costs, is a great way for small businesses to obtain supplies at a fraction of the retail price.

Many suppliers and providers are willing to offer discounts on bulk purchases, or for customers who have been loyal. By being proactive and doing some research, small businesses can save themselves a lot of money. 

Increase prices accordingly 

The key here is to find the right balance. During periods of inflation, business owners should take a look at their expenses and make adjustments to their product prices accordingly. For example, if the cost of the supplies are increased, increase the cost of the product so you can maintain making a reasonable profit. 

However, don’t go overboard here. If the prices go up too much, it may actually cause a decline in your sales. 

Streamline your operations 

It’s crucial you are aware of methods to streamline your operations and use digital tools to help save you money. By hiring fewer staff, if possible, and investing in digital technology, you can reduce your operating costs. 

Your business may be in a competitive market, meaning it’s more important than ever to cut costs and improve the efficiency of your business. Streamlining your business is a great way to achieve both.

Investing in digital tools will enable you to automate tasks, freeing up your staff’s time to focus on more important matters. Moving to digital operations will also help to reduce your paper usage, and therefore save printing costs. This may only help you save a small amount, but it will still help you during these difficult times. 

Diversify your products and services 

If possible, diversify your business so that you are not reliant on one particular product or service. This may mean expanding what your business does. For example, if you own a restaurant, you could start offering take-away or delivery services. 

By diversifying your offerings, you will be able to handle any economic downturn and keep your business afloat. 

Seek funding 

Thankfully, there are a number of options available for small businesses who need help with their cash flow. Government grants can be a valuable resource for many small businesses. They can provide funding for start-up costs, expansion, research and development and much more. 

Before you jump ahead and obtain funding, it’s best to speak to financial advisors who will be able to guide you through your best options and develop a plan which takes into account your unique circumstances. 

Do your research

If you fear your business may be on the brink of facing liquidation, there are plenty of company liquidation guides online that you could use, or alternatively you could directly contact an Insolvency Practitioner who will be able to assist you. 

Liquidation can happen to any business for a number of reasons, so don’t blame yourself if your company is facing this. Some reasons could include decline in the market, unexpected bills or a loss of core customers. If you believe your business is better off  being liquidated, or you wish to find a way to avoid liquidation, the best thing you can do is get the help of a professional. 

Before you make any large decisions on your business affairs, such as liquidation or obtaining government grants, it’s a good idea to get the help of professionals who will be able to assess your unique situation. In the meantime, you could work on small solutions such as cutting down your costs, negotiating with suppliers and providing different services which will attract customers.