Australia is in the grips of the fastest increase to inflation rates in a generation. Weather conditions, supply chain disruptions, the continuing COVID-19 pandemic and international pressures are raising the cost of groceries, fuel and accommodation, while wages remain stubbornly stagnant.
No-one needs to be told how tough the economic climate is at the moment, least of all owners of small and medium businesses.
With many Australians changing their spending habits to cope with the rising cost of living, businesses are also feeling the pinch.
Luckily, there are a number of tools and resources available for this crucial sector of the economy, to support SMEs through the number of challenges they may be grappling with.
Business owners are consumers too, and in addition to grappling with rising mortgages, eye-wateringly expensive fuel prices and rising grocery prices, the cost of doing business is also getting more expensive for SMEs.
Businesses are left with a difficult decision — bear the grunt of increasing input costs or increase their prices when they’re customers passing costs onto customers, who are already struggling to keep up with the status quo, and lose their competitive edge, squashing their potential for growth.
The good news is that SMEs don’t need to do it alone. For businesses facing difficult times or struggling to take the next step in their growth journey, there are a range of government grants, benefits and rebates available, but the challenge can be knowing how to find them and how to apply.
CommBank’s Benefits finder* tool helps businesses identify and apply for government grants and rebates they may be eligible to claim to help ease everyday costs or recover from a setback. By logging onto the CommBank app^ or NetBank and answering a few questions, businesses can quickly and easily see what support is available, and how to make a claim.
The effect of the cost of living crisis on consumer spending can have a dramatic effect on cash flow. Issues with cash flow can hit SMEs in a variety of ways. Aside from rising input costs, cost of living pressures hitting consumers mean that businesses may need to consider paying their employees more, or risk also being faced with a workforce shortage.
When facing difficult times and an environment of rising costs, understanding your cash flow, particularly your cash conversion cycle is vital.
Your cash conversion cycle is how long it takes to convert income into actual revenue. Knowing your cash conversion cycle will help you understand the position your business is in, and help you deal with current circumstances or even give you a better grip on your current situation if you’re considering if it’s the right time to grow.
Resources that help you track your cash conversion cycle like CommBank’s app-based Business Cash Flow tool**, will help you keep your finger on the pulse and improve the management of your business by giving you better visibility over your finances and operations, including how much money you have coming in and going out.
In the perfect storm of economic instability hitting SMEs right now, many are understandably more cautious than they may usually be, unsure if it’s worth the risk to invest in growth while for others, the biggest question is whether they can remain viable in their current state.
Tools like CommBank’s Daily IQ^^ can help SMEs see valuable insights about their current performance and identify opportunities for improvement and growth by providing insights tailored to your business.
Gaining understanding of your customers, their spending habits and your spending trends allows you to optimise your cash flow and improve your operations.
When experiencing financial strain including potential payroll increases and rising operating costs, it pays to plan ahead by being in control of your upcoming bills and payments.
Knowing what money will be going out will make it easier to plan and stick to a budget, and CommBank’s Bill Sense*^ can help prevent you from feeling overwhelmed by showing you upcoming payments up to 12 months in advance, as well as what you’re spending on bills every month.
Taking advantage of the latest offers available on your overhead expenses can also help ease some of the pressure, with discounted business nbn™, mobile and phone plans available through More – now offering eligible businesses 30% off^* for their first 12 months.
When it comes to managing your way through a cost of living crisis, it’s all about knowledge — understanding the current state of your business and the day-to-day factors that are affecting it.
CommBank makes everyday business banking easier by giving you greater control, services and tools to start, run and grow your business.
Visit commbank.com.au/business to learn more.
Read now: The digital experience your customers expect
The Commonwealth Bank (ASX:CBA) is one of Australia’s leading providers of personal banking, business and institutional banking and share broking services. With more than 15 million customers and a history spanning more than a century, the Group’s purpose is to build a brighter future for all. The Commonwealth Bank is Australia’s leader in digital banking and maintains the largest branch network across the country. For more information on Commonwealth Bank, visit commbank.com.au/business.
Comments