The last month has highlighted the challenges that many businesses face when it comes to supplies and costs.
Visions of people filling up plastic bottles with petrol or pulling trolleys of toilet rolls to their car may seem bizarre but they have become reality in the last year and this shortage of key supplies is affecting businesses.
Companies already face a number of problems as they struggle to get back up to speed following the COVID-19 lockdowns.
A shortage of supplies and skilled labour is another challenge that may prevent growth and risk their viability.
Of course, the media crying out for panic buying doesn’t help and neither does messages about a ‘black Christmas’ but these concerns are based on reality.
While we still face potential disruptions from the pandemic, the main issue at this time seems to be the growing shortage of deliveries due to issues with supplies of certain components and a nationwide driver shortage. This was typified in the panic buying seen at many forecourts.
The UK is facing many difficult issues at the moment, supplies and drivers being just two. Businesses must also contend with steadily rising energy prices and growing inflation.
To fix part of this issue, the Government has plans for temporary visas for 5,000 foreign lorry drivers but the British Chamber of Commerce (BCC) has described this measure as ‘a thimble of water to put out a bonfire.’
Last month more than a million vacancies were reported. The good news for many workers was that wages are rising, but the downside is that it creates inflationary pressures which in turn affect prices.
The current crisis all amounts to rising costs for businesses, which must adapt to new circumstances. Given this new period of uncertainty businesses should:
- Plan for future fuel shortages
- Assess their gas and electricity prices and seek out better tariffs
- Build a strategy for taking on staff as well as retaining key workers
- Seek out new suppliers that can provide the materials and services needed
- Outsource business functions to reduce costs and the reliance on certain skills
- Consider how rising supplier costs will affect their end product prices and underlying profits and investments.
For example, prolonged fuel shortages could be alleviated by turning to electric, particularly if you have a fleet of vehicles.
Why act now?
Crisis planning may seem like something that can be kicked down the road but eventually, that road runs out, by which point it is too late to act.
While many larger firms have contingency plans in place, for many small businesses they can be seen as an unnecessary additional cost.
However, regularly reviewing the costs within your business and creating a crisis strategy are both essential steps in building greater resilience. With an uncertain future ahead of us, now is the time to take action.