Picking up any daily newspaper at the moment – in the UK or across the continent, and on the other side of the Atlantic too – you will see some form of words referring to a crisis. Specifically, a cost-of-living crisis that is rapidly earning the title of “unprecedented”. Many households are already feeling the effects of this issue, with more expected to fall into a parlous situation as the prices of energy and various foods continue to rise.
As a business, it will be essential to respond to this issue in a proactive way. Among the people affected are the customers of businesses up and down the country and, indeed, the businesses themselves. So it is worth looking at the picture as it is – and as it will be – and thinking of ways that you as a business owner can deal with what is coming. This is going to be the best way to help your customers, your employees, and yourself through the next few months and potentially years.
Discard the received wisdom
In difficult financial times for a business, the supposed quickest way to get your head above water is to raise prices and cut costs. In this current crisis, that advice is about as much use as telling a drowning man to “just breathe through it”. With inflation running out of control, people have less scope to pay higher prices, and there are few areas ripe for cutting. The first thing to do is secure your staff – make sure they know they will be taken care of, look for any staff discount programs you can sign up for, and look at how you can help with childcare and medical needs.
Look to your overheads for efficiency savings
None of us is naive – this crisis is going to be painful for a lot of people and for businesses too. Sometimes the savings aren’t there. But it is essential to seek out advice from experts, including looking at measures like a power purchase agreement which can help you lower energy bills. Given that energy costs are a primary driver of this crisis, finding a way to cut them is heaven-sent right now. If you’ve sought to get employees back in the office, now might be a time to reconsider that, too. More people on site means more utilities used, and some people will be grateful to swerve the costs of commuting.
Be understanding with customers
If you operate credit accounts, you are likely to notice an uptick in late- and non-payments. As frustrating as this situation is going to be, it is going to need your understanding – because people are having to prioritise costs. Stepping up collection activity in this situation risks making a bad state of affairs worse, as many customers are going to be worried about merely keeping the lights on, never mind paying other accounts. Offer payment schemes and payment holidays where you can, and refer customers to independent advice services and charities. Of course, you need to make money too, but it frankly costs more to chase a customer than it does to give them some leeway.
It can easily feel like the crisis times never end, and this is harsh on businesses too. However, being resourceful and understanding is going to be your best approach in the short and medium terms.