Cost of living crisis: make every pound count
It seems that whenever I’ve been speaking to our clients recently, no matter what sector their business operates in, they are all facing the same strong financial headwinds.
With recent political changes at Westminster, interest rates jumping exponentially each month, increasing inflation at over ten per cent now and eyewatering energy prices as we head into the winter months, it certainly gives rise to colourful discussions about how to batten down the hatches and ride out the current storm.
Facing a cost-of-living crisis and with a widely accepted recession on the cards, several customers and business owners that we support at Westcotts are becoming ever more cautious about spending habits.
Many are worried about the spiral of seemingly ‘everything changing at once’ and are having to look at how to survive by making changes to their terms of business and policies.
Making every pound count in terms of how businesses spend to ensure they get the best value for money is an absolute priority right now.
Digital thinking and efficiencies
So, what can you do, faced with these pressures bearing down on your business?
Perhaps one of the first steps you should take is to review your product offering and pricing strategy. Compare your pricing to your competitors and look at, and emphasise, your unique selling points wherever possible.
Ask yourself, are you keeping in touch with your customers enough? Look at ways to engage with them more regularly and try to encourage customer loyalty.
Take a good look at your market place and indeed, your marketing strategy – what is working and what is not? Is your website up to date?
Would writing a regular blog with interesting and engaging content add value to your business? Could you make more use of social media platforms, such as Facebook, Instagram, and LinkedIn to increase your profile and reach more customers.
The key is keeping one step ahead of your competitors by staying on top of your industry’s trends and looking for new opportunities.
Now is the time
There has never been a better time to look at your business as a whole – often it takes a financial crisis for some business owners to take a step back and evaluate whether their systems are as efficient as they could be. Use this time to your advantage and think about what you could do better.
Tools such as Dext and Xero can make your business more efficient and give you better management information you need to help run your business, so you can keep an eye on overheads and make sure you are getting value for money.
Think about whether you can run any incentives – perhaps speak to your suppliers who are also keen to generate business in these challenging times.
Cash is king
Don’t forget that cash is king – it is really important to keep on top of your work in progress and cash collection.
Can you ask for stage payments or deposits to keep cash flowing? Many people have come to expect this in a changing marketplace, but it is hard to make changes such as these when you worry about the impact on your customers and how they will react.
Speak to them, communication is always key to any changes you make to the way you do business.
Many of our clients are also looking to reduce any external debt – what are your interest rates? Are there redemption penalties for early repayment? Do you have surplus cash to pay these off or can you renegotiate any terms?
Overall, no business is immune to the current landscape and there is no doubt, we are all in for a tightening of our belts and less discretionary spending.