The rising cost of living and the impact on small businesses


The cost of living has increased dramatically, energy and fuel bills has been one of hardest hit areas. This is having a huge impact on small businesses as they are seeing costs increase from rising energy bills and customers are being more careful and spending less on their products and services. Businesses often don’t want to pass on these price increases to customers but have no choice or face the risk of losing their business altogether if they do not pass on the price increase. In this article we have some advice for small businesses who are struggling with the increase in energy and fuel costs.

Focus on core best sellers

If your business is struggling, we recommend avoiding taking any uncalculated risks during difficult periods. Instead focus on core products and services that are proven to make your business money. Spending money on new ideas, stock or unproven marketing campaigns could risk your businesses getting into more issues and debt. Instead use the cashflow you have within your business to reinvest in proven marketing channels and products that continue to sell all year round. If you have some extra budget, you may want to take a calculated risk but make sure you are not in a position where this money is needed to pay essential bills.

Avoid employing more staff

Although you may want to support the local community and offer jobs employing staff during difficult times can add a strain to your business finances. Recruitment and training are costly and requires investment from the business. It may also be the case that you need to make some employees redundant. This is a very difficult decision that no small business owner wants to make. By postponing hiring new employees you can also limit the number of employees you may need to make redundant. Retaining existing staff is often much more cost effective than employing and training new recruits.

Review business spend

We recommend that businesses conduct a complete review of current spend and identify any areas where costs can be cut. Things to review include business premises, electricity providers, stock provider, water bills, payment processing, and broadband. Although costs are rising there are still deals to be had if you shop around and negotiate prices with suppliers. An alternative if your business can operate remotely may be to reduce the size of your current business premises and request that employees work from home. This is a great way to reduce costs but also keep all your current staff employed. Employees might welcome the change as it is likely to reduce their travel costs and improve their work life balance.

Employee perks

Many businesses offer employee perks to help members of staff and encourage them to stick with the company. If you are desperate to cut costs, then this is one area that can be reduced without directly impacting on business operations. Where possible we suggest replacing perks with cheaper alternatives as opposed to removing them all together. Why not try giving members of staff a few options to choose from, this way you provide the perks that are most valued by your employees.

Travel

Travelling to meet potential new customers, suppliers and to deliver goods or services can be costly. Fuel prices are at an all-time high, minimising the travel to essential journeys only and planning trips can help reduce costs. There will be journeys that cannot be avoided, a good idea is to combine these trips into one journey to reduce costs.

As a fuelGenie customer you already have access to supermarket fuel, which is on average 3p per litre cheaper than other petrol stations. To maximise fuel savings, we recommend downloading our fuel prices app. The app allows you and your drivers to view the cost of fuel at fuelGenie eligible petrol stations near your location. You and your drivers can download the fuelGenie app for free, find out more about the fuelGenie fuel prices app.   

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