We are living through a perfect storm of international events and geopolitical upheaval that has a direct and tangible impact on our every day lives. First and foremost, it is our pocket strings that are being tightened as the cost of living continues to spiral with no end in sight.
Healthcare and hospitality businesses are only just recovering from the unprecedented effects of the pandemic, and now they find themselves caught in the middle of a new conundrum: striving to provide good value for their services while protecting their staff.
Governments are slow-moving behemoths, and while it is their responsibility to protect citizens and their livelihoods, company owners and key decision makers in business should not be shy about taking matters into their own hands. Tackling the effects of the rising cost of living at a company level can help keep businesses and their supply chains afloat, as well as offer support to the wider community.
What challenges are our businesses facing?
In healthcare, a shocking 55% of Brits surveyed think their health has suffered due to the rising cost of living. Fuel, food, and transport prices have had an unexpected knock-on effect on our health as some of the most vulnerable in our communities put off vital check-ups and postpone routine appointments.
More generally, in restaurants, bars, and cafés, but also in health and social care settings, prices are on the rise. From beer and basic foodstuffs to common medicines, manufacturers with monopolies on entire industries are announcing staggering price hikes as high as 12%.
Faced with double-figure increases in supply chain costs, as a small business in hospitality or healthcare, it can seem logical to pass those costs directly on to your customers. But they’re feeling the pinch, too, and higher prices can lead to a reduction in consumer confidence and, ultimately, lower sales.
With that in mind, you may find yourself wondering – like 75% of small and medium-sized companies in the UK who are concerned about the long-term impact on their business – what savings you can make now to ride out the storm. It is also important to keep one eye on the future, though. So, what steps can you take to tackle the rising cost of living? And how can you ensure your business has all the resources it needs for when normal service resumes?
Here are just a few ways in which your business can budget to cope with the rising cost of living.
It’s time for a Spring clean!
When you have a party at home, it is easy to get swept away in the ambience and forget about the dirty glasses stacking up in the sink… It’s the same in business when things are going well. Over the years, every company accumulates useless subscriptions (think about all those trade magazines you never read), redundant insurance policies and extended guarantees, software suites that never get used, and much more.
Now is the perfect time to take a hard look at your monthly outgoings and work out what can be stopped immediately without damaging your business activity. You may usually leave the accounts to your accountant and rarely delve into the details yourself, but making savings here of just a hundred or so pounds can offset those increased delivery costs of your much-needed supplies, and avoid you having to pass them on to your customers. What’s more, you will start seeing the positive effects of a good Spring clean in your bank balance almost instantly!
Audits are not just for accountants
Once you’ve taken all the deadwood out of the equation, you could turn your hand to carrying out an audit of all your essential expenditure, as you could still make savings in some places.
Let’s start with your staff. Employment overheads often make up the majority of small business’ outgoings. An easy reaction would be to cut staff – but don’t forget, dedicated and motivated staff are the ones driving your business and helping the cash flow in. On the contrary, by identifying individuals’ strengths and giving them more responsibility (and the pay that comes with it), you can empower your staff and motivate them to give more to your business.
If we place this within the context of optimising other budgets – such as marketing –, perhaps one of your waitresses, carers, or kitchen porters happens to be a dab hand at Twitter, Instagram, and Facebook. Well, instead of paying a digital marketing agency to run your accounts, why not end your partnership and give your member of staff the opportunity to get creative, shine the spotlight on your establishment (potentially helping it reach new audiences), and get paid a little extra in the process?
In fact, now more than ever, adjusting pay to keep staff happy, invested, and empowered means they will steer your business through these difficult times and come out the other end more loyal and committed thanks to your support. It goes without saying that that is better for business than letting workers’ financial worries drive lower productivity.
Other ideas for cutting costs: Replace weekly fresh flowers in customer or patient areas with longer-lasting green plants. Give a member of staff the mission of finding ways to reduce budgets linked to stationery (are there digital alternatives to printing patient records?) or takeaway packaging (do cheaper, more sustainable options exist?). Perhaps you can swap your pricey accountancy software for an open-source online alternative? Check with similar businesses in your neighbourhood if you use some of the same suppliers – can you strike a deal to combine orders and share delivery fees?
Maximise resource usage
If you have a restaurant that lies empty for several hours between services, why not think about organising a wine tasting or book club, or better still, renting the space out to a local group for a few hours a week?
Similarly, your coffee shop may have a quiet period mid-afternoon, so it could be interesting to create an offer for paying parents where their children can enjoy a free homemade smoothie or cookie. The drink or cake on offer can be inexpensive to produce, and the initiative will increase revenues at slow times, while supporting the local community.
The oldest trick in the book
A time-old way of increasing your cash flow to stay competitive is how you balance your books. Remember: you should make efforts to receive all monies owed to you as fast as possible, while paying what you owe at the last possible moment.
That being said, it is essential for businesses to support each other through these industry-wide challenges, so don’t forget to communicate with suppliers and staff alike. Pay them on time or let them know if you can’t, so everyone has a clear idea of their finances and can take necessary measures. Late payments to staff or suppliers can have a domino effect on the whole supply chain and wider local economy, meaning that you also stand to suffer from them later on.
Brigad by your side
Brigad works side-by-side with hospitality and healthcare businesses in their short-term staffing needs, giving them access to some of the best independent talents in the industry, while helping them stay on top of their budget. You can estimate the cost of a mission in under a minute and find temporary backup for your teams in half an hour.