With inflation at its highest in 40 years, it’s clear that these times require a thoughtful approach for anyone wanting to found or develop their own business. But don’t let that put you off. Despite the bigger picture issues, there are steps that you can take to keep your company on track as prices rise.
Assess your operating costs
While it’s good advice for any SMEs to keep on top of operating costs, this is especially relevant for those looking to save money. With the increase in gas and electricity prices, one of the most important factors to assess is your energy bill. Make sure you understand exactly what you’re being charged, and use a comparison site to see if you can get a better deal elsewhere.
And there are other ways to make savings, too: perhaps you could move to full-time home working, for example, eliminating costly office rents. Or cut down on third-party contractors, such as external PR and marketing teams? If money is tight, you might also be tempted to cut staff hours, but remember that your employees may well be struggling too. And while you might not be in a position to increase their wages, there are other things you can do — such as ensuring that all invoices are paid on time. A GoSolo Business Account can help you manage your outgoings quickly and efficiently, so you never miss a payday.
Learn from the past
If there’s one thing that SMEs have learned to do over the past few years, it’s adapt. For many business owners, their companies have evolved in ways that they could never have expected since the coronavirus pandemic began. But against all the odds, they’ve survived. If your business falls into this category, look at how you made it through those challenging months and see if any lessons can be applied to the current situation. Did you find new customers in an unlikely place, for example, or adjust your business model to benefit from emerging trends? You’ve already learned how to be resilient, and reinterpreting those skills can help you to move forward.
Keep on top of your cash flow
It’s always important to keep a close eye on your cash flow, but if you’re concerned about rising costs, you can gain a lot from monitoring your incomings and outgoings on a micro level. The more you know about where you’re spending your money, the better you can plan for an uncertain future — and spot any pitfalls long before they materialise. It’s also worth streamlining your payment system, encouraging customers to settle any outstanding debts promptly and without hassle. With a GoSolo Business Account, you can choose between a number of secure payment solutions.
Get government help
The good news is that there’s no need to struggle against inflation alone. To support SMEs across the country, the UK government has announced several schemes designed to offset rising costs, including an energy price cap. And with inflation showing no signs of slowing down, watchdogs expect more assistance to be laid out in the months to come.
Examine your prices
Pricing goods or services correctly amidst rising costs can be a nightmare. Too low, and you risk shouldering all the burden of inflation yourself — but too high, and you might alienate customers, who are often struggling with their growing bills. Experts recommend going back to the bare bones of your pricing strategy to see what works for you. And don’t feel too guilty if you need to raise your prices, as it’s been a common occurrence across the board in 2022.
A GoSolo Business Account helps entrepreneurs and small businesses manage their finances easily, pay on a Mastercard debit card, and save for taxes, invoices, and potential future outgoings.
Already Ltd? Manage your business account + admin in one app.