It’s a difficult time for many small business owners at the moment, as we see energy prices soar after only just recovering from the repercussions of the pandemic on many sectors.
Rising fuel and energy costs are currently one of the biggest threats to SMEs, with many seeing rises of 1400%. In the coming months, they will be further subject to huge increases, as firms are not protected by a price cap unlike consumers.
The SME Insights Report, which was commissioned by small business insurance provider Simply Business surveyed more than 1,000 UK small businesses. They found that 54% of SMEs were concerned that sky high bills could even lead to closure.
Small business owners are now calling on the government to review or reduce the energy price cap.
21% also believe the VAT cut needs to be reviewed or extended in a bid to help with business running costs. On top of this, 12% feel the government should review or reduce national insurance.
To counteract the costs, half of small businesses plan to raise prices in response to rising bills. Seven in 10 small business owners say soaring costs are their single biggest challenge in 2022.
What this means for small businesses
Small business owners are being forced to put together a survival strategy. Two in five are holding off on opening new premises with 48% unlikely to hire additional employees.
With almost six million SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – it’s vital that support is put in place to help weather the storm.
If you feel you must pass on prices to your customers, there are ways to go about it. You cannot consistently beat your large competitors on price. However, you can beat everyone with your service.
If the cost of materials means you need to raise your prices, the best way is to be open and honest and chat with as many customers as possible. Write a post addressed directly to your customers on your Facebook, Twitter, and across your social media platforms and be honest – everyone is aware of the cost of living crisis so will understand.
For the customers who don’t have social media, write a note on a blackboard or noticeboard in your shop, explaining all the reasons for the increases.
Small Business Cost Saving
Although these may be small savings in the grand scheme of things, little changes can add up and make a huge difference to the day to day running of your business. We’ve pulled together just a few ideas to help you save on costs:
1. Review everything
Over time, especially if members of your business have been working from home during the pandemic, you might have pieces of software or subscriptions that you no longer need or use.
If it’s providing value to your business, then keep them. However, you may be paying for things that no one is using anymore. Now is a good time to review processes and make sure you’re saving money on things you no longer need via a thorough spending analysis.
2. Renegotiate with suppliers
If you’ve been using suppliers for a while and think you could be getting a better deal, renegotiate and see if they can reduce your costs. You can do this with your internet and phone suppliers, stationary, rented equipment, software providers and many other outgoings. Some may not budge, however some will, so it is worth picking up the phone.
3. Take things online
If the pandemic taught us one thing, it’s that the majority of meetings can be done over Zoom, Teams or Skype quite easily. Cut travel costs by doing business over video calls and help towards becoming more cost efficient.
4. Sell things you no longer need
If you’re still remote working and have offices full of unused computers, monitors, TVs, printers, desks and chairs, sell them online. You can make money as well as free up space.
5. Make sure you’re looking after your team
Recruiting and training staff is expensive and time-consuming – the average cost of recruiting someone is £3,000. Hiring the right people to start with is great, but giving them reasons to stay is so important.
Demonstrate the opportunities for growth in the business, invest in company culture and offer benefits and rewards.
6. Turn it off
Yes, it seems obvious, but make sure that your energy costs don’t get out of control by turning things off when they’re not in use. Make sure the printer is turned off if no one is using it, kitchen appliances are not left running all day and lights are turned off in empty rooms. You may see a big difference on your next energy bill.
7. Look at your accounting
A good accountant will not only provide you with solid business advice, but they’ll also help you avoid costly and common errors.
They’ll be able to ensure that your personal finances and business finances aren’t mixed up, your bookkeeping is done correctly, your tax calculations are correct and that you’re not paying too much or too little, and that deadlines are met.
Accounting has been cited as one of the most stressful parts of running a small business, and making sure you don’t pay over the odds is important too.
Offset rising living costs and inflationary pressures with lower accountancy fees and switch to Gorilla Accounting.
Gorilla’s all-inclusive service means that we do all the hard work on your behalf. We will save you time and money, not to mention a lot less stress, for a monthly fee starting from £95 a month.
All Gorilla Accounting clients receive full access to FreeAgent as part of our great value fixed-fee all-inclusive package at no extra cost.
If you already have an accountant, it’s a good idea to assess your working relationship regularly, and if you’re not 100% happy, it’s time to switch to an accountant better suited to you and your business.
Switching with Gorilla
Switching accountants is a really easy process with us. We do all the legwork, so you can focus on your day-to-do without any distractions.
We can then get you onboard and set up with Gorilla in just 4 easy steps:
Step 1
Fill out our online application form here
Step 2
Give notice to your old accountant to inform them that you are leaving. We can do this on your behalf
Step 3
We’ll then obtain all the required information and accounting records from your old accountant
Step 4
We will set you up on FreeAgent and then you’re ready to enjoy our great service
If you’d like to find out more, you can fill in our online form, speak to a member of our expert team by calling 0330 107 9670 or request a call back at your convenience. They will be happy to discuss your needs and answer any queries that you have.
