In this article, we look at what Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is and its impact of on trade businesses. Read more...
How to prepare and adapt your trade business for rising inflation
Is your business ready for a slowdown? Multiple factors like inflation, the rising cost of materials, supply challenges ...
Is your business ready for a slowdown? Multiple factors like inflation, the rising cost of materials, supply challenges and increasing demand can all have a bad impact. You need to be ready.
With UK inflation reaching its highest level since 1982 (it jumped to 9% in the 12 months to April, up from 7% in March), the chairman of the Federation of Small Businesses has warned that almost half a million small businesses are at risk of going bust within weeks.
That’s the reason why when business slows down, you should prepare to keep going. In this blog, we’ll share some tips to help your business not only survive, but prosper.
Use technology to control your business finances and productivity
The more quickly and efficiently you and your staff work, the higher your profit is likely to be.
There are many apps that you can use to see how your business is performing. Having full visibility of the money that is coming in and going out is critical. That’s because it can help you make the best decisions.
Powered Now, for example, has a Report and Finances feature you can use to check your business performance, charts, reports, accounts export and submit your VAT returns.
>> Read this article to learn more about Powered Now Report & Finances feature
You can also watch this useful video that will give you an introduction and overview of the Reports & Finances tab in Powered Now.
Extra tip💡: If you record your costs in Powered Now you can look at the ratio between your sales and costs.
Powered Now is more than just a reporting app. Powered Now is the only affordable and easy to use app that lets you run your trade business on the go. No more juggling several apps, with Powered Now you can invoice, quote, schedule your jobs and teams, create and send certificates and all your paperwork will be in one place!
>> Want to find out more? Book a free demo today!
Avoid spending large sums of money
You may not be able to eliminate all of your expenses, but you can certainly minimise them. One of the best ways to start is by drawing up a budget and working out the most sensible places to cut back. You can also check and cancel those products or services that you are paying for and not using.
For example, some material prices are rising quickly, it could be worth purchasing the materials you know you will need in advance and store these in a secure space.
According to the Construction Leadership Council, price rises of between 5 and 10 per cent have been announced by many manufacturers so far this year, with energy-intensive products having increased by as much as 20 per cent.
It is also important to pay attention to your spending habits, warranties, returns and compare differences between suppliers. Better planning means that you can always buy your materials from your main supplier and avoid emergency purchases. That can save time, money and means you get credit.
All small businesses need a cash injection from time to time. The government is set to launch a £3bn-a-year small business recovery loan guarantee scheme to replace a broad set of financial support measures brought in to help businesses during the pandemic.
Offer specials to attract customers
During the slow season, there is a tendency for businesses to suffer from low business. Websites and storefronts become ghost towns, and customers might not remember you for a while.
To make up for lost business, offer specials and promotions. Make sure that your promotions play off the excitement of the season.
Look at your pricing
It is not the most popular choice, but looking at your pricing during rising inflation can protect your trade business. Keep your customer in mind. Consider only raising prices gradually. This minimises risk since some of your clients will not accept price increases.
Increased demand, materials shortage, inflation and many other factors can affect your business. Small businesses need to prepare to navigate these difficult times. This can also be an opportunity to review your internal processes, use better technology and apps, make better decisions and become more efficient.