As the cost of living crisis continues to affect families across the country, many businesses are also struggling to keep up and are being impacted by steep rises in energy costs, raw materials and employment overheads.  It is a tough time and whilst there are some things you can’t control, there are steps you can take to protect and make your business more robust with regard to the challenges we are all facing.

Ways for businesses to counter the cost of living crisis 

  • Review your expenses and see where you can cut back. Sounds obvious but in actual fact a lot of people think they are already operating as efficiently as they can, when in fact they just don’t want to deal with potentially difficult situations. This may mean making some tough choices, but it’s important to ensure your business is as lean as possible.
  • Think about ways to increase revenue. This could include raising prices, considering whether you are matching client demands, reducing product/service range for an interim period so you are only focusing on the most profitable areas, or finding new sources of income entirely. New sources of income can come out of leveraging your existing activities, considering what competitors are doing and where you could introduce something similar or better, or surveying your client base and asking them what additional services/products would most interest them.
  • Make a plan for how you’ll handle unexpected expenses. Having a buffer in place will help you weather any unexpected costs that come up. Scenario planning and working on a realistic budget for future times is important and can reveal some cost savings you may not have identified otherwise.
  • Monitor the news. Stay informed about changes in the cost of living crisis and how they might impact your business now or in the future. This will help you be prepared for anything that comes your way.
  • Speak to other companies you know who are operating in the same sector as you. There may be areas where working together may save all of you money in terms of energy or raw materials.

Review your Contracts and those of your suppliers 

On top of these direct ways to address the cost of living crisis your may also want to consider reviewing your contracts, both the ones you use as a business and those you are signed up to. This can help your business save money in the long run, get paid more quickly, reduce risk and also avoid making costly mistakes.

When you’re reviewing your contracts with third parties, make sure to look for any hidden fees or clauses that could be costing you more money then you would expect to pay. You may also want to renegotiate terms that are no longer favourable. Suppliers can be more flexible over this issue than you may expect. By doing this it can help you reduce your overall expenses and keep more cash in the business itself.

The contracts you offer clients also need reviewing. Are you offering terms that no longer fit the economic circumstances? Can you raise your prices/fees or alter payment terms mid-contract? rhw can review your contractual paperwork and help make your business a slicker and tougher operation.

In addition to reviewing how you operate, it’s important to keep an eye on the market rates for the goods and services you’re contracting for. If prices have increased since you signed your contract, you may be able to get a better deal by shopping around. We are obviously aware of the limitations on this within the energy markets at the moment but there may be scope for savings, for example, by changing your delivery firm or IT provider.

Reviewing your contracts regularly can help ensure that you’re getting the best possible value for your products and services particularly in a rapidly changing business environment.

Contact rhw’s company/commercial team for a consultation on how we can help your business operate more effectively within a very tough business environment.

Call 01483 302000 or Email