How Can Your Business Manage Inflation?
Inflation is rising at its fastest rate for 30 years with energy, food and fuel soaring. The Government sets the Bank of England an inflation target of 2% to keep our economy stable to help businesses and customers plan their finances.
The Government warned that inflation would reach 10% by the end of the year but at the time of writing this (23rd May 2022), inflation has already reached 9%.
With headlines being about price increases and everything expected to be more expensive, there are several measures business owners can take to protect their business and supply chain.
Plan ahead and bulk buy
Usually, when you buy in bulk, you will be able to save on costs and you may be able to negotiate with your supplier on price as you are placing a large order. Another benefit of buying in bulk is that you will be able to avoid delays as your goods will come in one delivery.
Assess your prices
Rising your prices can lead to a decline in customers, especially with the cost of living rising and people looking at ways to make cutbacks. You can look at different products with higher profit margins or run a promotion on a best seller to draw in more customers, who may then may purchase other items.
It’s good to keep an eye on your competitors to see what they’re doing and how they are responding. If they rising their prices, you will have two options: raise your prices & the price increase should help with cashflow or stick to what they currently are and attract more potential customers as you’re lower than the competition.
Reduce your expenses
Closely examine your spending and look to see if there are any areas where you can make any savings. For example, switching your light bulbs to LED ones if they’re not already can reduce your electricity costs or is it cheaper to get the train to a meeting as opposed to driving.
Also you should assess productivity and review your production costs, is there anything that could speed up the process and help towards saving costs?
Look after your existing customers
Existing customers already know your company and know the quality of your product or service and with all that in mind, they can be your biggest salesperson. Making your existing customers your brand advocates can elevate your business and keep a consistent flow of sales.
To do this, you will need to look after your existing customers whether that’s by engaging with them when they tag you in posts on social media, providing discount codes or by just showing your appreciation to them. They will be a loyal customer who will recommend you to friends and family and promote you for free through their social media channels – this can be incredibly cheaper than trying to acquire brand new clients,
Have finance in place
A business loan or line of credit can help strengthen your cashflow – cover any price rises, flexibility to bulk buy or purchase new equipment and machinery to improve productivity.
Another benefit is that if you’re looking to use the finance facility to purchase another item or service, you will be paying for it through affordable.
If you’re looking for a finance solution for your business, whether its stock finance, cashflow finance or asset finance, get in touch with our team for a no-obligation discussion about your finance requirements for your business. Call us on 01270 443510 or complete our contact form and we’ll be in touch with you as soon as possible.