CCBR Business Review

21 B U S I N E S S T I P S By Troy Marchant, Director, Adviceco Chartered Accountants Inflation is a concern for small business. Levels in the USA are worrying, and while it is not as bad here in Australia, trends such as higher cost of living and increasing interest rates have us all on alert. At the time of writing this, the current inflation rate is 5.1%. Small businesses need space and opportunity to rise out of crisis control and into the growth zone. Here are some positive strategic steps… Pricing strategy A blanket price hike is rarely well received by customers, however there are some more palatable pricing strategies that will help you to recoup rising expenses. You might consider a loss leader strategy, which is when you Small business defense against inflation MIND YOUR BUSINESS identify a key product and accept running it at a loss, but cross promoting other high value products/services and overall increasing the breadth of your sale. Focus on high margin goods and services. Small scale increases in short intervals can help too, and feels less offensive than one big jump. Manage wages Many small business owners feel forced to offer high wages to attract and retain talent, and to give regular pay rises. The impact on your bottom line is significant and irreversible. However, if you take the time to know what motivates your talent, you can offer competitive packages through incentives such as flexible hours, wellbeing initiatives, professional development and more. Renegotiate supplier contracts It is possible that you have fixed your agreements with suppliers, and it is likely the arrangement was made when the environment was very different to now. It is reasonable to request a renegotiation of a contract if it means keeping the professional relationship healthy, strong and mutually beneficial. It’s no good for your supplier to lose a good customer. It is also hugely beneficial to diversify your suppliers. Too many small busibut currently has no pilot facilities for product development. As part of this commitment, Labor will invest $17.14 million to create a Food Manufacturing Hub on the Coast, which will be backed up by $34 million from industry. It will be managed by not-for-profit manufacturing network, Central Coast Industry Connect (CCIC). This will create 285 jobs, made up of 85 during construction and another 200 ongoing jobs in food product manufacturing. This project has the full support of CCIC and their partners TrendPac, Regional Development Australia, and the University of Newcastle with food manufacturers Sanitarium, Mars Food, Sara Lee, and Agrana supporting the initiative. The Food Manufacturing Innovation Hub is strategically located at Lisarow near a unique mix of local and national food and beverage manufacturers and smaller artisan food producers. The hub will be based at Lisarow and will house a purpose-built facility designed to grow local food manufacturing businesses and attract more manufacturers to the region. Boosting manufacturing on the Central Coast CONTINUED FROM PAGE 11 nesses rely heavily, if not solely, on one or two suppliers. This means the customer is at the supplier’s mercy in relation to quality, supply and price. Diversification keeps the competition for your business strong and healthy. Streamline your cash flow processes It is critical that businesses have up to the minute debt and credit information so they can make informed present and future financial decisions. At AdviceCo, we are platinum members of Xero and proficient in other systems that not only make life easier for business owners, but saves them money. If you don’t have this in place, or don’t believe you are operating it at its maximum capacity, please speak to us. The last point is to consider the human side. When announcing a price change to your customers, discussing wages with your team or a new contract with your suppliers, remember the financial pressure they’re feeling too. Go gently and be sympathetic yet honest. Financial messages are difficult to deliver, and can easily offend the receiver. It can be beneficial to get professional support before you fire anything off. If you need to arm your business against the threat of inflation and need strategic tailored advice, please contact us for a complimentary Discovery Meeting: A poisoned chalice for Labor? CONTINUED FROM PAGE 4 the reason we are seen as a safe and stable place for global investors to invest in. This is now in jeopardy. Finally, will Mr Albanese be PM for the next election or Mr Shorten. The unions must be popping champaign corks with ACTU Secretary Sally McManus cock o’ hoop. The Australian Building and Construction Commission is now on the skids as the unions take over. After all the unions and the union and ALP controlled mega superannuation funds funded this election. Does it mean much for business on the Central Coast? Well, the big issue will be whether this Labor Government understands small business. In the past its been all about big business and big unions. The Central Coast’s 24,000 small and medium sized business owners will be holding their breath. Hopefully the new government will honour its promise to fund a food manufacturing hub at Lisarow (see Page 11). For all the billions of dollars the Feds and the Berejiklian/Perrottet Government have poured into Western Sydney at the expense of other electorates, including the Central Coast, it looks like that won’t do them a jot of good come March 2023. Edgar Adams Editor CENTRAL COAST BUSINESS REVIEW JUNE 2022