Working through the current cost-of-living crisis is challenging for any SME, but the industrial trade presents a few unique challenges. If you own or manage a small industrial business, knowing how to navigate challenging financial times can feel impossible.
We’ve outlined a few practical tips and approaches to follow to help steer your company through the current cost-of-living crisis in the UK.
- Prepare for recession
Despite the new Prime Minister feeling optimistic about the recovery of the UK economy, it’s wise to prepare your company finances for the worst. A recession is defined as a significant, widespread decline in economic activity on a national scale.
If a recession is looming, it’s wise to get your finances in shape. Secure funding before you need it, or make sure you’ve found a reliable source of financial support to potentially fall back on. If you need to ask for help, try not to see it as a sign of failure.
- Invest in quality tools
One of the major setbacks for small industrial businesses is the cost of tools. As prices rise with inflation, it’s a good idea to buy quality, durable tools to keep your service offerings competitive, despite harder times.
Whether it’s a sturdy set of screwdrivers or the most effective,long-lasting grinders from RS, it’s always worth keeping high-end tools in your collection. Furthermore, you could save money in the long run if you never need to replace a cheaper toolbox.
- Keep your employees safe
Making sure your staff are provided with the right type ofpersonal protective equipment at work is always important, but it’s imperative through uncertain financial times. It’s your responsibility to make sure that your no team member has grounds to make an injury claim against you.
Additionally, we’d recommend conducting regular risk assessments to keep your site operating safely. Not only would this reduce the risk of accidents within your team, but with the correct signage and safety precautions, members of the public will also be less likely to have an accident.
- Manage your cash flow
Keeping your business afloat through poor economic circumstances revolves primarily around your ability to manage cash flow. Essentially, this means taking proactive steps towards:
- Reducing expenses
One of the best ways to prepare for a potential recession is to examine and amend your company expenses. Try not to cut back on existing company benefits for staff.
- Managing receivables
Ensure that your business has relevant legal contracts in place, especially those regarding late invoices. Not only will this reduce the risk of outstanding balances remaining unpaid but should also make your administrative processes much more effective.
- Maintain communication
Above all, it’s crucial to constantly review processes in your business. Discuss operations with your management and team members to make your workflow as efficient as possible, and always be realistic about what you can afford.