How is the cost of living crisis affecting business?
By Mr Bankruptcy
26th July 2023
The cost of living is continuing to make headline news. We often hear about how it impacting our households and individual pockets, but should it be a serious concern for businesses too?
The impact of high inflation
High inflation and comparatively low wage growth is making life difficult for many businesses. Inflation pushes up production costs, rents etc and businesses are paying more for everything: raw materials, equipment, energy, fuel, shipping costs etc. They are also under pressure from employees to increases wages to help alleviate the burden of high inflation on them too.
Businesses are often hit by a double whammy; as household budgets are squeezed, people have less money to spend on goods and services, and for businesses that trade globally, where inflation in the UK is higher than in other countries, it makes UK exports more expensive to make and less competitive internationally. Revenues start to decrease and when businesses are forced to raise prices to cover their higher costs, they do so in fear of alienating customers.
And as other businesses struggle, the number of late payments increases, cashflow becomes tighter to manage. As the financial situation changes, business owners need to reduce costs to help prevent debts.
How are businesses coping?
Business sentiment is being tracked closely as fears of the impact of ongoing high inflation remain prevalent.
In May, the Institute of Directors’ (IoD) Directors’ Economic Confidence Index, which is a measure of business leader optimism in the UK economy, had stabilised at -6, a significant increase from -64 in November 2022. However, the IoD also reported that the overall sentiment was broadly negative-to-neutral, with 39% of its members feeling pessimistic about prospects for the UK economy in the year ahead, as opposed to 33% feeling optimistic.
On the other hand, a recent ONS Business Insights and Conditions Survey for the two weeks ending 13 July 2023 found that 22.3% of respondents thought their business’s performance would increase over the next 12 months, as opposed to the 10.8% who believed it would decrease.
Neither of these reports paint an especially optimistic picture of the future, so what can business owners do to help manage the impact of the cost of living on their companies?
Taking control of your finances and your wellbeing
A downturn in business and long-term uncertainty is often a cause of anxiety for business owners, so it’s at these times that it’s important to take greater control of income and outgoings.
In our James Rosa Associates blog you can read about Six essential reports your business needs and how to create a budget that works for you to help you manage your business and personal financial wellbeing.
In addition to the financial side, it’s also important not to neglect your own mental and physical wellbeing at a time when employees, partners, friends and loved ones may be depending on you. Don’t be afraid to talk about your concerns with someone you trust.
James Rosa Associates
James Rosa associates is a firm of debt advisors and debt adjustors. We pride ourselves on our supportive and non-judgemental approach. We offer a full range of advice and professional services to individuals and business owners/directors who face hard-to-manage debt or who are involved in civil or commercial disputes. Our services include:
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
Do you qualify for one of our free consultations?
If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.
Achieving the Dream: Starting a Business with Your Significant Other
By Brittany Fisher of financiallywell.info
19th July 2023
Starting a business is one of the most exciting and challenging endeavours that you can embark on in your life, and it could be even more thrilling if you have your significant other with you. However, starting a business with a partner, especially with your significant other, can be quite tricky, and it’s important to carefully consider each step before diving in. Today, James Rosa Associates discusses some of the most important things you’ll need to consider when starting a business with your significant other.
Communication Is Key
It’s essential to establish open and honest communication from the start. Starting a business with your significant other should start with a serious and in-depth discussion. Both partners should discuss their reasons for starting a business, their personal goals, and the potential positives and negatives of the business. By doing this, you can ensure that both of you are on the same page, working in a positive environment on a business with a clear direction to work towards.
Choosing a Profitable Business Idea
When choosing the business you want to start, make sure to pick one that has the potential to be profitable. The business should be something that both of you are passionate about, but not necessarily something that you just enjoy doing. Conduct a thorough market analysis to see if the business you choose has enough revenue potential, so you can get a return on your investment.
Weighing the Benefits of an E-commerce Store
Opening an e-commerce store is a great way to take advantage of the growing number of online shoppers and increase your revenue potential. By selling products online, you can reach a wider audience and offer greater convenience to your customers. To make the process easier, you should consider using a platform dedicated to online store creation and management. These platforms offer a range of features and tools to help you set up your store, manage your inventory, and process payments.
Establishing a Business Model That Works for Both Partners
Devising a clear business model is crucial in establishing a successful business. Both partners should agree on how the business will operate, its primary goals, how it will generate revenue, and how the profit will be split. Having a business model that both partners agree on reduces the chance of disagreements and legal issues in the future. You’ll also need to settle on a business structure, as well.
Determining Roles
Dividing tasks equitably is another vital factor when starting a business with your significant other. Assign responsibilities based on your skills and talents, consider your personal interests, and use your respective roles to support each other. If both partners contribute fairly in running the business, the chances of success are even higher.
The Importance of Legal Agreements in Business Partnerships
Creating legal agreements that outline the terms of your business partnership is essential when starting a business. This could include a partnership agreement and a buy-sell agreement. By having these legal documents, the partnership’s terms will be legally binding and can help you avoid disagreements in the future.
Devising a Clear Marketing Strategy
Finally, it’s essential to have a clear marketing strategy. A solid marketing strategy will help you reach prospective clients and help ensure the success of your business. Invest time and money in branding and digital marketing as this can play a significant role in building a solid customer base and driving traffic to your business.
You should definitely look into content marketing, as well. By producing more targeted and engaging content, you can start developing a reputation as an expert in your industry, which translates into deeper trust with your potential audience base – and greater sales! Content marketing can help you really resonate with your audience, resulting in greater customer loyalty that can make all the difference in today’s competitive market.
Starting a business with your significant other requires careful planning, open communication, and a lot of hard work. Remember that starting a business is a challenging adventure, but by following these critical considerations discussed above – from content marketing to e-commerce platforms and legal agreements – it can be extremely rewarding. Starting a business with your significant other is an opportunity to work together towards a common goal, and with the proper planning and strategy, you can build a successful business and a happier personal relationship.
Brittany Fisher has been a Certified Public Accountant for over two decades, with expertise in taxes, personal finance, and financial literacy. She founded Financiallywell.info, her own website dedicated to providing valuable insight and advice about managing money. Through her work, Brittany strives to empower individuals with the skills and understanding needed to make sound financial decisions – from budgeting and saving to retirement planning and beyond.