What does this mean for Businesses? 

Rapidly rising inflation can mean consumers are more cautious about making discretionary purchases and it’s a good idea to avoid sudden price rises that encourage consumers to look around for cheaper alternatives. A gradual plan for price increases is probably a more sensible option for businesses.

Inflation will also affect the prices you pay for stock and other expenses, so now is a good time to reflect on your stock levels and consider alternative sources of supply and review the profitability of your products, goods and services to ensure they are and will remain profitable.

Clearly, in these uncertain times, it is a good time to plan ahead here are a few ideas to help with remaining Resilient.

– Review your Budgets and set realistic and achievable targets for the remainder of 2021 and 2022.
– Get rid of won’t pay customers.
– Review debtors list and chase up overdue invoices.
– Make sure your terms of business contain explicit payment terms.
– Assign responsibility to one individual for invoicing and collections.
– Agree on extended payment terms with all suppliers in advance.
– If appropriate, review banking facilities and discuss future needs.
– Put extra effort into making sure your relationships with your better customers are solid.
– Review and flow chart of main processes in your business (e.g. Sales processing, order fulfilment, shipping etc) and challenge the      need for each step;
– Encourage your staff to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction);
– Use ‘bottom up’ budgeting where everyone in the office gives input on areas over which they have control – target a 10% cost saving;
– Review your staffing needs over the next few months;
– Get your members of staff involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues;
– Review your list of products and services and eliminate those that are unprofitable or not core products/services;
– Establish your key performance indicators (KPI’s) and measure them on a daily basis e.g.:
– Sales Leads generated

  • o Orders Supplied/Fulfilled
    o Cash Balance
    o Stock Turnover
    o Debtor Days
    o Gross Profit
    o Net Profit