What is the cost-of-living crisis?
In the simplest terms: It is the increase in the cost of everyday items and services whilst wages remain the same. People have less money to spend on non-essential items, which in turn can impact businesses severely.
Almost 72% of business owners are concerned that the current cost of living crisis will negatively impact their company. Even more shockingly, 23% of leaders predict their business may not survive the financial year if prices continue to rise at this rate. 67% believe they will lose clientele as their services will be bought less often.
Why is the cost-of-living crisis happening?
• Costs have been rising since countries have reopened their economies from Covid-19 lockdowns.
• Gas prices have risen due to increased demand from Asia and outages in production due to the conflict in Ukraine. This is a huge problem as nearly 80% of households in England are heated by gas and a third of electricity is generated in gas power stations.
• Disruption of supply chains has also caused prices to increase. Shutdowns due to the pandemic in Asia have caused a shortage in semiconductors (which is an important component in common consumer goods).
• Global shipping costs have also risen as shipping firms reduced capacity due to the pandemic
• Many international companies have ceased trading in Russia due to economic sanctions or reputational risk.
• Although the UK only imports around 13% of its fuel from Russia, it is still susceptible to any disruption throughout the EU. Due to the integration of the UK and EU’s energy markets, their prices move together.
Unfortunately, incomes aren’t raising as quickly as prices are. Wage growth in the last year has not been sufficient to keep pace with inflation. Pay is only forecast to rise by 5.8% compared to inflation of around 10%.
What can be done to help your business?
• Suppliers – Reviewing suppliers can be a good first step to start cutting costs. Do your research on potential providers and gather some quotes. Domestic supplies may be more resilient and reliable against geopolitical events than their global competitors.
• Supporting Employees – If you have staff, they are more than likely feeling the impact of the rising cost of living. If the cost of increased wages is too much for your organization, consider other ways your business can reduce the burden on staff. For example, you can sign up for a staff discount scheme which can give employees money off shopping and meals out.
• Consumers – Whilst everyone is trying to cut back on spending, so are your customers. Think about how you can help customers while ensuring they maintain their business with you. You could introduce loyalty discount schemes, cashback rewards or payment instalments to help spread the cost of buying your product.
• Use W_rkspace!
How can we help?
It may seem like now would be a terrible time to move into an office or change your work location. However, our office solutions can help you save money in the long run.
• Office Space – For as little as £150 per desk, our private offices have all of your bills included in your monthly rental, meaning that whether you are a tech whiz or a digital nomad, we will take care of the water, electricity and heating at no extra cost!
• Fuel – Instead of travelling into Manchester every day, our business hubs are local, meaning you can avoid the traffic and the fuel prices.
• Co-working – From just £14.99 a day, if working from home isn’t for you, our centres offer you an excellent place for you to get your head down. Top quality amenities, comfy chairs and plenty of plug sockets, we’ve got all the gear to make sure you have a good day!
Want to learn more?
Call us on 0333 344 8005 or email us at email@example.com