When we asked 1,000 SME business leaders in the UK* what potential barriers to growth they are facing in the next 12 months, 34% told us they are concerned about high inflation.
To find out more about the other barriers businesses are facing, you can read our other blog looking at rising costs of materials and high energy costs here.
Inflation is a core part of the economy – it is an ever-present force that businesses must adapt to. When inflation is predictable, adapting isn’t such an issue. But, with inflation rising since 2022, many businesses have become concerned.
The simplest way of fighting back against inflation is to be more proactive with your budgeting. This includes identifying overspending, securing deals and discounts via bulk purchases, and streamlining workflows to enhance productivity and cut back repetitive tasks.
Adjusting prices is a hard pill to swallow, both as a business and a consumer. Unfortunately, when inflation is high, failing to adapt service or product costs can leave your business struggling to keep up.
Whether you increase prices to cover current and future inflation or employ a flexible pricing strategy that adjusts alongside inflation, whether we like it or not, such changes are mandatory to overcome future complications. Benchmarking yourself against your competition can help with ensuring you stay relevant and in line with customer expectation, so you don’t inadvertently price yourself out of the market.
Economic uncertainty disrupts businesses of all kinds. Such an external power is difficult to control, but there are coping methods:
Having a set amount of business savings can be crucial to help deal with an unstable economy. Such funds can be used to supplement potential losses in income and to retain crucial personnel.
While economic fluctuations can be hard to decipher, the benefit of doing so usually pays dividends. Staying abreast of things like consumer buying confidence, interest rate swings, and changes in demand are crucial in determining where these economic fluctuations are coming from. Knowing this can give you a head start when it comes to bouncing back.
Similar to monitoring trends, keeping tabs on your immediate competition in the market is another important part of combating economic fluctuations. By this, we mean monitoring product launches, price points, and marketing activity, all in a bid to glean insights from their strategy.
There is an element of invention off the back of this work, but having a benchmark in the industry to measure against is very beneficial in revising your own goals.
Any economic uncertainty can lead to rising interest rates which can have implications for businesses. In such circumstances, you can look at a few options, including fixing for longer or refinancing.
We’re here to support your business with our tailored business finance solutions and award-winning business savings accounts. Find out more today by clicking here and discover how we can help you to achieve more.
*Source: Research conducted by Opinium on behalf of Aldermore between 16 – 29 April 2024 of 1,000 SME Senior Decision Makers.
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