Posted on: 28/04/2023
From the rising cost of living effecting consumer spending to higher inflation and energy prices pressuring business costs, many businesses in the UK are facing an uncertain future as a result of the UK's economic challenges.
According to the Office for National Statistics1, around four in ten (41%) trading businesses reported a rise in the price of goods or services bought in December 2022 compared with the previous month, according to data collected between 9 and 22 January 2023.
It is a difficult time for UK businesses and there are a lot of challenging factors that need to be considered and planned for.
What does the cost of living mean to small businesses?
Many businesses may find that these rises in energy costs mean they are being forced to re-evaluate spend in different areas of their business, depending on the sector. Fuel cost increases mean that businesses that work with vehicles and transport are being hit with higher operational costs. Businesses are also finding that equipment and materials have risen in price, throughout their supply chain, meaning production is more expensive and ultimately, they are having to consider increasing the cost of their products or services to reflect these changes. Employee retention may also be an issue for businesses, with record numbers of people leaving their jobs due to lack of employee benefits and wages not keeping up with inflation, it's more important than ever for businesses to communicate effectively with their staff.
Over three decades, Exemplas has become one of the UK’s leading providers of business support. In that time, we’ve helped over 600,000 SMEs, delivering some of the UK’s most important public sector contracts. We work closely with our partners to help SMEs grow, innovate, become more productive, access grants and break into new markets – generating measurable results for businesses, local people, communities and economies. With the cost of living in mind we’ve been adapting some of the support we deliver, in order to meet the needs of businesses and help them face the challenges they’re currently facing.
Hertfordshire Growth Hub
Leading a consortium of business support specialists, Exemplas deliver Hertfordshire Growth Hub, the entry point to all business support advice, information and resources across the county.
To ensure that Hertfordshire Growth Hub addresses the issues businesses are currently facing in the region and plan for future support requirements, they invited businesses to complete a short survey. The survey data is being used to enable the Growth Hub to work with local stakeholders to help provide the business support that is needed most.
In terms of action that businesses have taken because of the rising cost of ‘doing business’, 51% of those surveyed have said that they have increased the prices of their goods or services, 36% reported scaling back their growth plans and 33% have reduced their spend on marketing related activities.
The survey findings highlight that those businesses surveyed feel that the greatest challenges over the next 12 months will be:
Lack of consumer confidence/spending
Rising Energy Costs
Staff Recruitment & Retention
Survey respondents have told the Growth Hub that the main barrier to addressing these challenges is the cost of making changes/taking action.
Innovate UK EDGE
Exemplas deliver Innovate UK EDGE in the East of England, a service that empowers innovation-driven businesses to grow at pace. Neville Snell, one of our Innovation & Growth Specialists, reflects on the support he’s given to clients facing cost of living challenges;
“Several of my clients have faced significant cost price rises in the last year and as such have had impacts on viability. During this time, I have helped them implement various strategies from supply chain management and cost base opportunities to a more in-depth review of viability and debt exposure including the financial options available to them.”
Business Productivity Service
Exemplas, in partnership with Leeds Beckett University, is delivering a new package of funded support to small and medium-sized businesses in West Yorkshire.
The aim of the service is to boost productivity and growth in the region by highlighting key barriers to improving productivity and working with businesses to develop the tools needed to address them.
Businesses, with between five and 100 employees, will receive advice and support on how to boost productivity – and will be supported to create a clear and achievable productivity improvement plan. The majority of businesses will then be offered grants for new equipment to address further productivity gaps.
To find out more about the work Exemplas delivers in the public sector, click here.