Whatever the size of your business, whether you’re a sole trader selling artisan bread in Galway or a large company operating across the whole of Ireland, there are a range of factors that can impact turnover, profitability and ultimately whether or not your business can go the distance during tough economic times.
Let’s take a look at a few of the measures that you can take to make sure you’re doing everything possible to keep your business profitable.
Review your prices
This might seem obvious, but one of the key things to affect your bottom line will be the prices you charge. When you’ve been in business a little while though, sometimes you forget to regularly review your prices, or you worry that putting your prices up will mean losing customers.
The harsh reality is that the inflation rate topped 8% in Ireland in 2022, and so if your prices remained the same, chances are your profits went down overall as you struggled with increasing costs. Rather than putting it off, it makes sense to regularly review and increase your prices so that changes are small and gradual and customers aren’t suddenly faced with a daunting hike.
Keep an eye on international markets
A lot of Irish businesses trade internationally, so it’s important to be aware of changes in interest rates, inflation and currency fluctuations in other countries as well as in Ireland. Simple tools like the DXY chart can be a really useful way to keep your finger on the pulse. Even small changes in the US dollar rate can have a big impact on Irish businesses if they are selling into the US or sourcing any raw materials from abroad.
Monitor your business costs
Along with increased inflation comes a rise in your business costs, whether that’s the flour you need for your artisan bakery or the transport costs involved in shipping your finished product across Ireland and further afield.
In tough economic times when inflation is higher than normal, these costs can escalate quickly and so it’s important to check in regularly with where you could potentially save money and increase profits. For example, could you do a price comparison exercise and consider switching suppliers? Or maybe you could look at possible economies of scale to be gained from buying raw materials in larger quantities, maybe even teaming up with another business to benefit from increased buying power.
Downsize your premises
A lot of Irish businesses switched to remote or hybrid working during the pandemic, and many have found that actually they don’t need everyone to travel into an office every day, and that things still work well remotely. In this case, you might wonder if it’s worth spending money on offices at all, or if you do need a base, perhaps it doesn’t need to be as large.
Whatever your business, stay on top of your income and expenditure, don’t be afraid to take bold decisions, and aim high!
