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Top tips for small business owners to stay afloat during the cost of living crisis

Posted by Shweta Raina on Jun 28, 2022 11:03:49 AM
Shweta Raina
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Untitled design-Jun-28-2022-09-56-09-74-AMThe FSB chairman warns that almost half a million small businesses could go bust in weeks without a fresh wave of support from the government.

For many business owners, the current economic climate is causing concerns for the future, but they're steps to take which can help save costs and get more from suppliers. 

Tips to keep in mind:

 

Cut unnecessary costs 

During times of inflation, it is especially important for small business owners to be mindful of expenses. A careful review of where money is going can help to identify areas to make cuts without compromising the quality or value of services. For example, you may be able to save money by switching to a less expensive supplier for your office supplies or renegotiating your lease. 

In addition, there are many ways to cut costs without affecting your bottom line, such as switching broadband and phone providers or reducing energy consumption. By taking a proactive approach you can often negotiate a better offer with more value, especially if switching suppliers.

 

Negotiate better deals with suppliers and service providers

Negotiate better deals with suppliers and service providers. By getting quotes from multiple vendors and taking the time to haggle, small businesses can often get the supplies they need at a fraction of the retail price. 

Many service providers are willing to offer discounts for bulk purchases or yearly contracts. By being proactive and doing some research, small business owners can save themselves a lot of money. For example, the switch to digital communications can be a huge money-saver for businesses and will allow them more flexibility in communicating with their customers.

 

Streamline operations 

It's crucial to be aware of ways to streamline your operations and use digital tools to save money. By using fewer staff members and investing in digital technologies, you can reduce your overall operating costs. In today's competitive marketplace, it's more important than ever to find ways to cut costs and improve efficiency. Streamlining your operation is a great way to do both. Investing in digital tools can help you automate tasks, freeing up your staff to focus on other areas of the business. Moreover, using digital technologies can help you reduce your paper usage and save on printing costs. By taking steps to streamline your operations and using more digital tools, you can save money and in these tough economic times, every little bit helps.

 

Increase prices modestly 

The key is to find the right balance. During periods of inflation, small business owners should take a close look at their expenses and make adjustments to their prices accordingly. For example, if the cost of rent goes up, that added expense should be reflected in the price of goods or services. However, businesses should be careful not to hike prices too much, as that could quickly lead to a sharp decline in sales. 

 

Get creative with marketing 

One way to do this is by offering sales or discounts that are hard to resist. Planning a grand opening or special event can also help attract attention and draw in customers. It’s necessary to make sure that your marketing materials are top-notch and accurately reflect the quality of your products or services.

 

Diversify your services/products

It is important to diversify your offerings so that you are not as reliant on one particular area. This may mean expanding the services you provide or the products you sell. For example, if you own a restaurant, you could start offering delivery or take-out options. Or if you own a retail store, you could start selling online. By diversifying your offerings, you will be better able to weather any economic downturn and keep your business afloat.

 

Seek Funding

Fortunately, there are a number of options available for small business owners who need extra cash flow. One option is business finance. Business finance is a type of lending that can provide working capital for businesses of all sizes. For small business owners who are looking for a way to get their business off the ground, government grants can be a valuable resource. These grants can provide funding for start-up costs, expansion, research and development, and much more.

Before you make any decisions, it's crucial to sit down with a financial advisor and develop a plan that takes into account your unique circumstances. With the right planning and advice, you can ensure that your business weathers the cost of living crisis and comes out stronger on the other side.

Topics: Small business tips

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