The cost of living crisis is having a significant impact on families and businesses. While it can be difficult to make predictions for the year ahead, some of the potential challenges for businesses could include a fall in demand, increased operating costs and supply chain issues.
With many businesses still recovering from the pandemic, businesses must take steps to reduce the effects of the cost of living and seek opportunities for growth.
What steps are businesses taking to limit the impact of the cost of living and is growth still possible in 2023?
Reduce your outgoings
To help your business maximise growth, you could explore ways to reduce your outgoings and bring your business costs down. Many businesses may be faced with some difficult decisions this year, but there are ways you can cut expenses without making redundancies. Now is a good time to review all of your outgoings to identify the areas you can make some real savings.
Revaluate your prices
Price rises aren’t ideal, especially when your customers are dealing with other rising costs. But with supplier, manufacturing and running costs increasing, raising your prices is one of the ways you can help cover your costs while continuing to grow your business.
When raising your prices, be open and honest with your customers. They’ll want to know the reasons behind the price rises, and many will expect it during this time. It’s also important to push the value of sticking with your business. From your exceptional support and customer service to fast and reasonable shipping times, you should aim to push the positive things your business can offer its customers. Price increases shouldn’t mean a decline in quality, so be sure to push those messages through your marketing efforts.
Switch to local suppliers
Working with local suppliers can have many benefits for your business. Not only can you reduce shipping costs and import fees, but you could benefit from faster turnaround times – helping you meet your demand. Switching to local suppliers will also help reduce your carbon footprint, helping to reduce emissions and enabling you to run a greener business.
Another benefit of working with local suppliers is that it can serve as a positive PR story. Developing better links in your local community and supporting other businesses can resonate positively with your customers.
Look at smarter ways to use technology
Could technology help your business run more effectively? More and more businesses are turning to AI to improve processes and efficiency. There are different tools businesses can take advantage of, from AI chat functions to AI marketing. Many of these tools are cost-effective, and you may find that some automation tools, like Microsoft Power Automate, are already included in your subscription packages.
Explore new sources of revenue
During the COVID-19 pandemic, many businesses were forced to explore alternative revenue streams to help make up for lost profits due to closed-down services or supply issues. With businesses facing challenges once again, we’re likely to see new trends emerging once again as businesses seek growth.
Subscription services are a popular model to offer your customers, especially if they can be established easily and at a low cost. Producing smaller or trial versions of your products could also be an effective way of winning over new customers or helping existing customers cut costs.
You could also consider alternative platforms to market your products. Instagram and TikTok both have in-platform marketplaces, which can prove profitable for businesses when combined with impactful social media content.
Keep your business secure
Alongside the challenges of the cost of living crisis, is the ongoing threat of cybercrime. Keeping your business secure from data theft, malware and other threats is more important than ever. Cybercriminals are aware that businesses and individuals are vulnerable right now, which could lead to an increase in incidents.
Dealing with a data breach or financial loss could distract your business from its usual activities, limiting your ability to focus on activities that would lead to growth.
Make the most of available funding
If you’re concerned about increasing costs during the cost of living crisis, there could be some funding available to you. The government, banks and charities offer various schemes to help business owners which could help keep you afloat.
Alternatively, you may wish to seek other types of funding, such as private investment, to help you make the enhancements to your business that could help facilitate growth.
Adapt your digital marketing strategy
Digital marketing spending is expected to grow in 2023, although at a slower rate compared to previous years. This won’t apply to all businesses, however, with many looking to reduce their advertising spend this year. Whether you’re maintaining your digital marketing budget or you’re having to make cuts, there are ways you can make your marketing efforts work harder for your business, such as:
- Investing time and resources into quality content to appeal to your audiences.
- Focusing your efforts on retargeting existing customers and visitors to your website.
- Improving your SEO to make your website more visible for those searching for the products and services you offer.
- Highlighting the value your business offers through its products and services, especially in light of increased prices.
Adapting your digital marketing strategy will help you make the most of your available budget and deliver the biggest ROI for your efforts. Marketing strategies should be flexible and adaptable to respond to changes in the market, while also taking note of the activities of your competitors that could help influence your own efforts.
While the year ahead has a lot of unknowns, it’s important to focus on the future of your business and how you can help it grow. From cost-saving exercises to changing some of your approaches, you can help your business navigate this difficult time, ready to emerge stronger and more robust when the economy recovers.