Skyrocketing energy prices, rising rates and unpaid bills – Companies across the country are feeling the pinch

According to a new survey just published by Accountant Online, 36% of business owners urveyed noted that Rising Business Costs was their biggest concern with 29%of respondents expressing their worries regarding potential Cash Flow issues. (full survey results can be found below)

“This survey of our client base highlights that there is a sizeable element of the tech and professional business community that isn’t a multinational but lays somewhere in the middle. These groups may not be feeling the pinch as much as other industries due to a difference in cost base”

Notes Larissa Feeney, CEO of Accountant Online – “Usually when you’re hearing from tech companies in the media, you’re only getting the experiences of the large multinationals – this survey highlights that there is a sizeable element of the business community that isn’t multinational and isn’t a traditional SME (Tourism, hospitality, retail) but lays somewhere in the middle. These groups aren’t feeling the pinch as much as other industries where their cost base may be different”

Despite this, concern is growing – When businesses were surveyed in June 2022 24% noted that Cash Flow was a concern, when surveyed againin September 2022, 29% placed Cash Flow issues as a primary problem

“When times are hard and/or there is a recession looming it’s difficult to grow a business and maintain profitability. Now is the appropriate time to analyse your business from the top down, give yourself the opportunity to focus on costs. Ensure that you are running a sustainable, viable business and don’t bury your head in the sand”

Advice for Concerned Business Owners

Accountant Online CEO Larissa Feeney provides some actionable tips for those who may be anxious about their business going forward;

Analyse the Business

An overall analysis of the business during these periods is hugely important.

“Perform a business analysis regularly we should all be doing that regardless of the circumstances, it’s just that we’re all forced to do it when times are leaner. This will allow you to determine whether things are sustainable in the long run and that the business is simply not performing as well as it should due to a recession.”

Examine your Overheads

“Now is the time to start looking at your costs, in particular, the overheads. Rent, insurance, utilities, subscriptions, memberships, advertisings;these types of costs tend to increase at a higher rate when businesses are doing well, and you can find yourself caught very quickly.

Renegotiate with supplierswhere possible and price around. You may also discover that certain processes within the business can even be outsourced. If there’s anything that can be outsourced, it may be more cost effective during a recession or when the business might be a bit more vulnerable to fluctuations. You can stop and start a contractor relationship much easier than you can stop and start an employee relationship.”

Staffing Costs

“For a lot of service businesses, employees and the cost of labour is the highest cost. This is an extremely difficult issueto navigate now due to the current state of the labour market and what we’re now dubbing ‘The Great Resignation’ – This is unchartered territory and something we didn’t see during the last recession in 2008. How businesses contend with this issue obviously depends on the size of the teams and options available when it comes to funding. Get creative when it comes to employee benefits. Examine the perks you can offer your employees that may not necessarily cost that much when it comes to the bottom line, things like flexible hours, remote working.You want to be able to keep your best people if you have the choice.”

**FULL SURVEY RESULTS**

Interestingly, the same set of questions were posed to business owners in June of this year. Although the core results do not differ hugely, there are some interesting points to note –