How the Rising Cost of Living May Affect Your Business
14/06/2022
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The cost of living is rising exponentially in 2022, with many salaries struggling to match the extortionate heating costs and petrol prices. Being a business owner at this time can be extremely difficult, as you have to think of your employees and their well-being while struggling with the rise of costs yourself.
We have put together a guide on how the rising cost of living may affect your business and what you could do to keep your company thriving…
1. Support Your Employees
With the current crisis spreading, your employees may be feeling very overwhelmed and one of the best things to offer is support. Making sure that your employees are not struggling heavily or having excess financial strains on them is key to ensuring happiness in the workplace and also maintaining motivation/productivity.
Organising wellbeing meetings, mental health courses or financial support sessions could be a great first step toward providing the support that people within your workplace may need. Teaching employees how to deal with financial stresses or worries can be extremely helpful if they are under pressure from the cost of living crisis.
2. Cut Unnecessary Costs
Cutting unnecessary expenses can be highly beneficial for your business, not only during the cost of living crisis but overall. Undoubtedly, the crisis will affect your employees, but it’s important to think about your personal finance and your business to ensure that you can stay afloat.
Assess where your finances are going and if you don’t have one, hire an accountant (even if you are a small business) as they will be able to calculate your expenses and see where you may be able to save money.
If there are subscriptions that you are losing money to or routes you can take to cut costs, then do so.
3. Make Your Company a Safe Place
Making your company a safe place to be able to be open about worries and financial stress is extremely important. During this crisis, there may be plenty of employees that don’t have a suitable support circle, or that have exhausted government support and can’t pursue anything else.
Putting in the effort to ensure that your business is a safe place for them to speak about their struggles and have open conversations about potential pay rises, bonus schemes or anything that may be beneficial to your employees is great.
As a business owner, you must be open to suggestions, opinions and giving help, as your business will not thrive if your employees are under overwhelming stress and can’t produce necessary work.
4. Look at Alternatives
Since the cost of heating and electricity has increased exponentially, it may be time to look at renewable sources. The initial costs of renewable sources of power such as solar and wind can be expensive – however, after that, they are generally free to run and have very low maintenance costs (solar panels).
Looking towards renewable energy sources can not only help your business to cut costs and opens your budget towards more important things but also helps the environment and is eco-friendly.
5. Government Help
The government has introduced a couple of grant schemes which could help your business if it’s being affected by the cost of living crisis. During their spring budget, the government announced that it would increase the Employment Allowance from £4,000 to £5,000 as a way to tackle rising inflation. Meaning, that small firms will be able to claim up to £5,000 off their employer NIC payments, which is estimated to help over 50,000 small businesses.
Taking advantage of government grants and schemes will give your business extra money which you can invest in employee support, pay rises, or improving your overall business.
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That’s all for now! Take into account our 5-step guide to keeping your business afloat during the rising cost of living crisis to ensure your employees feel supported and you are saving money where possible.
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