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10 Tips From Business Experts On How To Handle Financial Pressures This Winter

Everyone is feeling the pinch right now as Britain’s cost of living crisis continues, with energy prices rocketing and interest rates rising, meaning those on variable mortgages are seeing their repayments increase. This economic situation means that it’s even more important to have a close handle on your business and personal finances. Don’t feel helpless – focus on the things you can control and read this advice from financial and business experts.

1. Get to grips with what’s coming in and out

Create an up-to-date budget. It sounds obvious, it is obvious, but how many of us can genuinely say that we have an accurate budget for ourselves? Your budget will be the foundation of your future financial well-being. Simply list all of your outgoings and all of your income. Make one for your personal costs and income and one for your business – keep them separate but make sure the income you take from your business covers what your need personally. If it doesn’t, your business isn’t working for you as it is and needs reviewing.

2. Make sure you know exactly when it’s going in and coming out

Your budget will give you a broad view as to if your income is covering your costs, but you’ll need to do a cash-flow forecast for your business

When you initially consider doing these things, it can seem daunting, but you will feel a lot more in control when you know exactly where you stand instead of burying your head in the sand. With this information, you can make decisions, take action and will feel motivated to beat your targets.

3. Be a financial minimalist

Take the principles of being a minimalist and apply them to your finances. This doesn’t have to mean being frugal but being more intentional so you can spend less and save more.

7 steps to being a financial minimalist:

  1. Budget: Use your budget document and check in with it often.
  2. Do a 12-month review: Review all of your bank statements from the last year. Make sure you know what all the payments apply to and see if there are costs you can cut, like subscriptions you no longer use.
  3. Get out of debt: Avoid debt at all costs. If you have any (mortgage aside), prioritise paying it off and balance transfer it to an interest-free credit card if you can to pay it off quicker.
  4. Don’t spend it all: Live below your means. After you have paid for all the essentials, put a portion of what’s left towards savings, investments and creating an emergency fund.
  5. Take your time: Before you spend any money, ask yourself if this is something you really need, value or love. Can you give yourself a bit longer to think about it?
  6. Avoid impulse and instant buys: Avoid using contactless payments, 1-Click and having your card details saved online. This makes it a lot easier to make impulse buys.
  7. Track: Track everything you spend and review regularly. The act of tracking alone will make you more intentional with your spending.

4. Review your marketing

Now is the time to review your marketing, but do not slash (I repeat do not slash) your marketing efforts and budgets.

“Here’s what NOT to do:

❌ Dramatically slash your marketing budget through fear

❌ Focus on short-term goals

❌ Forget about your existing customers for want of new customers

Instead, think about doing the following:

✅ Reallocate your existing marketing budget into channels that have previously delivered success

✅ Strategise and execute your long-term goals

✅ Focus on your existing database (this is your secret weapon!)

It doesn’t make it any easier, but recessions come and go, and the businesses that come out of the other side are the ones who stay in the game when everyone else has left the playing field.” – Paul Fernandez, The Growth Guys

5. Boost your sales

It could be tempting to try and attract more customers, but it will be easier, more effective and have more impact on your bottom line to increase conversions.

6 two-minute ways to increase your conversions using your current customers and contacts:

  1. Contact your current customers, subscribers and followers to see if you can help them with anything.
  2. Ask your customers or clients for referrals or to recommend you.
  3. Follow up with any leads to ask if they are still looking for help.
  4. Review your website homepage copy and make sure you have a clear message, call-to-action and testimonials.
  5. Create a short-term special offer to create a sense of urgency to buy.
  6. Create a new package or upsell.

6. Raise your prices

There is an easy way to boost your sales without having to win new business – raise your prices.

“There is a cost-of-living crisis. If you watch too much news, you’ll be convinced to stop spending money and maybe even seek the safety of a “secure” job. But as a business owner, plenty of strategies are available to you to level up your income. One of these is by making a price hike across the board with your clients. But what about long-term clients? Is it right to charge them more? The answer is almost always: YES

This video will hopefully inspire you to do yourself (and your clients) a favour by raising your rates.” – Matt Saunders, Creator of The Freelance Business Builder

7. Don’t catastrophise

What you pay attention to will become your reality, so don’t let the negative thoughts take over. If you can stay positive and be adaptable, it will give you a competitive advantage. 

“The young do not know enough to be prudent, and therefore they attempt the impossible – and achieve it, generation after generation.”

Pearl S. Buck

8. Plan a worst-case scenario

One way you can stop yourself from catastrophising is to face your fears and think about what is the worst that could really happen and what your Plan B would be. Tim Ferris uses a technique called Fear Setting, and for it, you’ll need a piece of paper and to follow these four steps.

  1. Divide your first piece of paper into three columns and head the columns ‘Define’, ‘Prevent’ and ‘Repair’.
  2. Under ‘Define’ write a list of the worst things that could happen, be specific and also give them a number from 1-10 to rate their impact.
  3. In the column ‘Prevent’, write down actions (small or large) that could prevent those things from happening.
  4. In the column ‘Repair’, write down what you could do to get back on track if the worst thing does happen.

9. Look for opportunities

“People do the opposite in a recession to what they should do. They play it safe. They stick to a formula that they already know has stopped working. And, because they hold on to the old way, they end up losing. This is a time for creativity and brave ideas. It is a time for rebirth. It is a time for accelerating innovation. You must learn to let go of what used to work. To make space for what will work. You want to come out of this stronger than you went in. If you play not to lose, you mostly lose. This is the time for your best ideas, not your safest. Your ideas are now more valuable to your business than at any other point. You can’t afford to be busy. You can’t afford to be average. You must think.” – David Hieatt, The Do Lectures

 10. Ask for help

 If you have taken all the steps, you can and there is still not enough left over to cover your essential living costs, ask for help.

Charities like Turn To Us will help you assess if you are due any benefits, taxes and rates relief, or local grants you aren’t aware of. Benefits are your entitlement as a taxpayer. Speak to your energy provider – they’re not allowed to cut you off and have to be seen to give you support by law. Don’t be afraid to ask for help – millions of businesses and households are experiencing this across UK and Europe – it’s not something we can control.” – Peter Komolafe, Financial Expert @conversationofmoney.

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Sophie Cross

Sophie Cross is the Editor of Freelancer Magazine and a freelance writer and marketer at Thoughtfully.

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