Key takeaways
- Customers are spending less
- Businesses need to target their marketing
- Diversify your offering
- Make changes now to save in the long-term
- Re-assess business costs and consolidate
Consumers are tightening their wallets, and the cost of doing business is rising but what effect will this have on your business?
As the average household’s disposable income continues to lower due to rising living costs resulting in stricter budgets, there’s less room for spending on nice-to-haves and luxuries. This often has a knock-on effect in the consumer goods and luxury sector resulting in lower sales.
Mixed with increased running costs, you may need to rethink your business strategy, diversify, cut back, or find new revenue to keep your business afloat (or maybe even thrive?).
The current political and economic climate has influenced inflation leaving the best-laid plans less effective than before.
We’ve put together some tips on how best to navigate the next twelve months
Reduced consumer spending? Increase your reach.
One way we can combat this cause and effect is to increase the reach of your voice, product, and presence. But how do we do this? Marketing and technology.
In research conducted by the UK bank “Aldermore”, 35% of UK small-medium enterprises are planning to invest in new technology to increase their online presence and 45% are focusing on reducing business expenses to lower their bottom line over the next year.
This can include ramping up marketing activity to better target their customer niche, improving their existing online systems and user experience, and making their website become more efficient to run or cheaper to convert their preferred customers, resulting in tighter budget control and pennies saved in the long term.
Creating a concrete business strategy can help you keep an eye on what is important within your business and identify cost-saving processes. Some new processes may cost more in the short term to set up, however, if the long-term gain will end up saving or bringing more revenue to your business, the short-term sacrifice can often be worth it.
Asset finance can be a great way to provide some short-term cash injection to your business, Aston shaw can help secure this method of funding for you. Get in touch to learn more about asset finance.
Increasing your marketing activity can also reach new customers, explore different channels, and find a new voice to shout about your product or service. The more eyes and ears you reach, the more potential customers will notice your product.
However, you need to craft your voice in brand presence in the right way to ensure you’re hitting the mark. This is different for everyone, but introducing what’s known as A/B testing can help dramatically with finding what works for you.
Get in touch with one of our business advisors today to find out what Aston Shaw can do to help grow your business whilst remaining cash efficient.
Higher energy costs
Inflation and global supply chains are affecting fuel and energy costs throughout the UK.
High oil prices can be linked to an economic recession throughout history and statistics from “Eurostat” suggest energy inflation is up by 41.9% year-on-year as of June 2022.
Many businesses believe fuel and energy costs will negatively affect their business going forward.
While the UK government has announced the Energy Bill Relief Scheme (EBRS) to support businesses through rising energy costs, some businesses may continue to struggle to cover the cost of their energy bills. This may leave business owners cutting down on other costs.
The EBRS will cover your business until 31st March 2023, however, a review is set to be conducted to identify the UK’s most vulnerable businesses in the time leading up to March.
In the meantime, Aston Shaw can help you assess your business costs and identify any room for tax relief or cost savings in your business to help mitigate the rising energy costs.
Find out where we can help by contacting us
Higher mortgages
Some business owners may fall victim to increased mortgage rates – this is a move by lenders, to slow inflation. The week of October 3rd saw the average 5-year mortgage rate reach a 12-year high, with a typical rate of 6.02%.
Source: Moneyfacts.co.uk
If you’re looking at getting a commercial mortgage, it may be better to do this sooner rather than later, Aston Shaw can help secure the best rates for you, get in touch to find out more.
What can you do to combat the cost-of-living crisis?
Price increases
Increasing prices is the first thought for most businesses, however, clear communication and sensitive positioning are key here.
You must ensure long-term customers see continued value in your service or product or risk scaring them off, and new customers must equate the initial value with the price point.
It can often be a careful balance of rising prices to stay afloat and keeping prices in line with customer expectations.
When gaining new business, look for promoting higher-yield services to ensure your business can continue to remain fluid during these tough times.
Adapt your business model – Diversification
Focus on how your customers are behaving and adapt your business practices to cater to their changing habits and needs.
Finding solutions to your customer’s problems, even if they are not yet aware of the issue, can be life-changing for a company and even unlock revenue that was there all along.
Knowing your customers and their clients is key. Every interaction is an opportunity to solve a problem, find their pain and find a solution you can offer to take that pain away. This builds trust, and creates new revenue for your business, remaining fluid whilst doing so.
Should you wish to find out more about future planning for your business, contact us today to meet with one of our experienced Business Advisers who can guide you in the right direction for your business to make a big impact.
Find out more about the Aston Shaw Business Advisory service:
