Prepare your business for the Bank of England's predicted 2022 recession
Brexit, COVID, The Great Resignation, and now high inflation. To say that small businesses are being tested would be a substantial understatement. Almost every business has been affected by at least one of these challenges, if not all of them – but for smaller businesses, it’s often the owners who end up bearing the brunt of the effects, resulting in a reduction in take-home pay, high levels of stress, sleepless nights and disillusionment with the very idea of running a business.
Autumn is just around the corner. The air will turn crisper, more leaves will turn brown, the cost of heat, electricity and driving will increase further, and the UK may well fall into recession. Normally, the “talking down” of the economy is a large contributory factor to recessions occurring – the more the potential for recession is discussed in the media, the more people tend to reduce their spending and this in itself can tip the balance into negative growth. This time, though, it feels different – regardless of the narrative, a reduction in spending on general goods and services seems inevitable, given the amount of income which is to be consumed by the basics of food and fuel.
For small businesses, it’s hard to know what to do. For many, demand has remained reasonably robust so far, but the dark clouds are looming overhead. Do we invest, or conserve cash? What do we do when revenue falls and costs rise? Do we borrow in the hope of better prospects in the future, despite rising interest rates? Do we consider the point at which we should close down altogether? Many businesses are already saddled with debt from the last couple of years – this may have been a lifeline for some, but a lifeline can become a noose when circumstances change. Perhaps it’s the uncertainty as to exactly what will happen, and when, which is the cruellest factor of all – will there even be a reliable electricity supply through the winter, regardless of cost?
The struggle has started, and for most small businesses with limited resources, it’s going to get worse. Outgoing costs are inevitably rising – many businesses are now fearing the annual contracted price review written into many ongoing contracts for office space, telecoms and other services; an RPI-based annual increase seemed reasonable when the contract was signed, but a 14.5% annual increase (July 2022) with higher to come is going to hurt. Supply chain issues remain in some industries, limiting the opportunities for businesses to actually realise sales. Committing to the recruitment of new employees is hard when faced with the prospect of falling demand, yet shortages of suitable candidates remain. It’s likely to get more difficult to obtain payment for committed sales in industries which offer credit to customers. Just to add to all the challenges, industrial action has affected services which many small businesses rely on.
Here at Need More Time, we’re far from immune to these problems. However, the services we offer do help our customers to better manage their business challenges. Our flexible outsourced telephone answering and business administration services allow our customers to operate with minimal fixed overheads, reducing the need for office space and removing many of the costs and complexities of hiring staff. We enable our customers to work from wherever best suits them – home, their vehicle, an open-plan shared office space, a coffee shop – whilst maintaining a professional and responsive front-end to their business. Our Virtual PAs and Business Assistants can chase payments due from our customers’ debtors, re-arrange appointments when transport strike dates are announced, and ensure information keeps flowing when our customers’ own clients are affected by supply chain problems.
If you’re looking for ways to ensure your business provides excellent customer service without committing to long-term increasing costs, talk to us today to discover more about how we can help you.