Amid recent increases in gas, electricity, and petrol prices it has been reported that more UK businesses are preparing to raise prices than at any time since the 1980s.

A recent report from British Chambers of Commerce found that almost two- thirds of firms surveyed expected to raise prices over the next three months, the highest since the survey began in 1989.

At Libra, we have been working closely with business owners who have been negatively impacted by inflation and the aftermath of the Covid-19 pandemic. In this current landscape, it is understandable that business owners may be nervous about the effect that rising costs will have on their businesses and will be struggling to navigate this difficult time.

What do price rises mean for small business owners?

For many, the natural result of rising prices will mean increasing your own prices for customers. To ensure the continued success of your business, it’s imperative to go about this in the right way. So how can you find the right
balance?

4 ways businesses can navigate the rising cost of living

Let your customers know about price increases beforehand

Everyone is affected by rising prices in energy, gas, and the supply chain, both professionally and personally. So it hopefully won’t come as a surprise to consumers that businesses are affected too. However, they might not understand which areas of your business this affects, and consumers being hit with yet another inflated expense is naturally going to lead to some frustration. In this case, transparency is key. Giving as much prior notice to your customers as possible, as well as being honest about the factors that have led to price increases will (to most reasonable customers) be appreciated!

Focus on your USP

When costs are rising, some customers will see it as a reason to seek out cheaper options, but value for money isn’t the only influencing factor for consumers. Consider what added value you can provide for your customers. What made customers choose you in the first place? Customer service, the quality of your product, the sustainability of your business practices, and the benefit of what you provide for your customers are all important pieces of the puzzle in creating a dedicated customer for your business. If you can hone in on why your business or product is of value in comparison to your competitors, and promote this message throughout every aspect of your business, then you have a basis on which to justify your price increases and still retain a loyal customer base.

Consider ways to reduce your energy consumption

Rising energy costs are one of the most prominent price increases affecting everyone at the moment. Whether your business is based out of an office or a storefront, you are likely to be feeling the impact of these increases right now.
The challenge is to focus on ways you could reduce your energy consumption and identify solutions. Consider Phantom energy you could be wasting by leaving equipment plugged in whilst not in use, or research more energy-efficient equipment that could save you money in the long run. It’s as good a time as any to get more eco-conscious! If you are struggling to identify any areas for improvement, you could look into an energy audit which
will help you to find solutions you wouldn’t have thought about before.

Benchmark your current suppliers

A huge component of the need for increased costs for many businesses is, in turn, increased costs from their own suppliers. That’s why it’s beneficial to do your own research to ensure you’re getting the best for your money. Good relationships with your supply chain are important – but there is no harm in keeping abreast of the market and comparing costs so you can be certain that you are investing in the right suppliers. Even if this research only leads to opening up a discussion with your current suppliers, it could allow both of you to work out how you could help each other through this difficult time.

These are just some of the starting off points for saving you money and ensuring you are prepared for what could be a turbulent year for business owners.

If you’re still looking for more help, or you’ve tried all of these already, our expert advisors can offer you more bespoke solutions to guarantee you are best placed to deal with inflation and settling current or prospective business debts.

Speak to our team today to find out how we can help your business find the right balance.