Inflation on small businesses and how to manage it…

31st October 2022

Inflation is top concern for many business owners

Inflation in the United Kingdom is currently running at 10.1%. This is close to its highest level since 1982 and 5 times higher than the Bank of England 2% target.

Many businesses have done well to survive the last 2 years and having looked forward to a period of economic stability post-Covid, business owners are now confronted with the opposite facing another year of financial difficulty, and inflation being a top concern.

Minimise the impact inflation has on your business

Inflation and rising costs aren’t going away anytime soon. It remains crucial for small businesses to prepare for the financial challenges ahead. It’s always worth evaluating your current processes to find more efficient ways of working and strengthen your financial position. Many firms will be closely monitoring their company costs to ensure their outgoings are kept to an absolute minimum.

Every business can take steps to safeguard themselves and maintain a positive cashflow. Managing your Business Finance’s effectively will mitigate the risk of rising costs and inflation. With so much media attention currently being paid to rising costs in the UK, it’s no surprise business owners are worried. Below are a few suggested strategies that small business owners should consider when managing inflation and rising costs:

Adjust your pricing strategy – pass on the cost to your customers. This will help your business maintain healthy margins. If you pursue this route, you must ensure your new prices remain at an appropriate level that keeps you competitive with similar businesses in the market. You should also communicate the price changes to your customers to maintain healthy customer relationships.
Regularly audit your business expenditure – this can be highly beneficial and is extremely sensible to regularly review your company outgoings to eliminate any surplus expenses that are no longer necessary or needed for your operations.
Communicate with your suppliers – it is imperative to communicate on a regular basis with all of your suppliers. This way they can alert you of price increases ahead of time and allows you to plan proactively, including adjusting your own prices and processes to account for the change.

Here at Independent Business Finance, we remain dedicated to helping all clients, providing a bespoke service and taking the time to get to know you and your business, and this is simply because we care and have an interest in your company aspirations.

If increasing costs are causing temporary issues in your business, consider reviewing your company cashflow options. There are many funding solutions available to help. We have extensive industry knowledge and can help support during these challenging times.