New advice to help SMEs beat cost of inflation

Finpoint, the Chamber 's preferred finance hub, has issued new advice to help SMEs deal with the cost of inflation.

While earlier this year SMEs were reportedly focused on continuing growth plans, these efforts are being superseded by concerns over inflation.

More than three quarters of small business owners name inflation as their biggest concern in relation to the cost of running their business as well as preventing growth strategies.

FSB 's Q4 Small Business Index found that “spiralling energy costs are causing widespread difficulties, especially for micro-businesses of fewer than 10 employees, who face many of the same challenges as consumers when it comes to negotiating energy deals but without the same protections. ”

Finpoint says SMEs should have a business plan in place with a cash flow strategy that they can refer to should they need to make unexpected payments or should need to ready itself against inflation.

Updating your business plans, cash flow forecast sand budgets ahead of time to account for inflation will allows firms to continue trading effectively and look towards achieving growth.

Furthermore, Finpoint advises that when assessing cash flow forecasts, businesses should ensure it is up to date, particularly when market conditions are volatile.

Continuing to review forecasts across quarterly periods and calculate how much cash is required to manage increases across utilities, VAT, production costs, staffing costs and marketing costs is also advised.

The Finpoint business finance hub said: “As the cost of living rises for both consumers and businesses, SMEs need to find alternative ways to balance profit margins that do not rely on raising prices over the level of inflation to make a profit. ”

Read the Finpoint advice in full.

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