Research released last month indicates that an overwhelming majority of small businesses are struggling under increasing business costs, including insurance and transport costs.
At a time of low inflation, with CPI at 2.2%, businesses might have expected to benefit from some much-needed respite. But 95% of small businesses have found their costs rising at well over double that.
The Forum of Private Business members’ survey found that the very smallest are struggling the most, threatening the UK’s long-term economic recovery.
Aptly, it was rising energy and transport costs that fuelled the 6.7% business inflation rate, with around 90% of all respondents experiencing a rise in outgoings.
And further problems are looming on the horizon, with a 3p increase in fuel duty due to kick in in January, compounding blanket rises in energy price rises that will hit just as temperatures drop.
“It could be that we are shaping up for a winter of discontent,” said Alex Jackman, the Forum’s senior policy adviser.
“Many firms are already battling the economic elements, but if the weather turns it could spell the end for those already walking the tightrope.”
So what can be done to combat these rises?
Market forces
While energy companies will see their costs rising, savings can be made by reviewing your contracts.
While the cost of raw materials have also risen, look at consolidating your procurement through a few chosen suppliers, while look to specialist providers.
This is especially true of insurance policies. Insurers and brokers tailor themselves to target clients, so it is highly conceivable that you can find savings by shopping around.
Broker Quote Me Today offer a range of specialist motor policies and their access to an expansive panel of insurers gives them a competitive edge when finding excellent cover and low prices. QMT Fleet Insurance and QMT Motor Trade Insurance premiums are among the most competitively priced on the market.
Fire safety and security contracts should be put out to local companies, essential contracts like cleaning can be reduced in frequency and non-essential services, such as water coolers, can be cancelled altogether.
Technology
It’s ridiculous to think you haven’t looked into reduced costs already. Reducing costs is easier said than done, especially for small businesses that will be running particularly lean anyway.
But technology can help you achieve further savings. Client visits can be reduced through the use of Skype and Go-to Meeting, a scanner can see you cut down on the amount of space you need for filing. Service companies can do away with offices completely by enabling employees to work at home, using email and video conferencing to communicate.
When people espouse the use of technology, many people are put off by the assumption that it requires significant capital expenditure. But many improvements can be brought about through software, while cloud storage etc. can actually see your in-house technological requirements reduced.
The rise of the internet as the world’s premier market place also offers opportunities. Digital and content marketing offer cost-effective ways of reaching your target audiences and an innovative approach can see you stealing a march on larger competitors.