We all know first-hand how the cost of living has increased substantially in recent months and how this in turn has had an impact on the expenses that small businesses face. Key factors that have had a major influence on these rises are:
- An increase in inflation, which puts demands on employees and a potential need for salary increases.
- Shipping, fuel and import/export costs have risen.
- Energy prices have reached record highs.
So, what strategies can be adopted to help tackle these rises? Here are some of the options available to a small business:
- Control your costs, keep a close eye on all expenditure, look at operating costs to see where adjustments can be made. Can less expensive materials be utilised and can machinery be operated at different times of the day to minimise energy costs.
- As much as possible use local suppliers. Not only does this offer support to similar small businesses in your region but it also restricts excessive lead and travel times. Costs in relation to transportation and import charges can be eliminated.
- Review any funding or historic lending agreements. You might have some asset finance, invoice finance or business loans which have been taken on a long-term agreement. Consider options for re-finance as interest rates are currently incredibly competitive.
- Maintain a positive cashflow and avoid having to pay any excessive interest charges. If necessary, look to employ business finance as a cash buffer then, when unexpected costs need to be paid, the business will still have a positive cashflow.
If you have any questions or would like to discuss how you can deploy savings within your business, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.