How to keep your business afloat during the cost-of-living crisis

This year's crazy inflation is really giving tradies a hard time. Everything's going up – from the suppliers' prices to the gas at the pump. Plus, there are fewer folks calling for services, and more job cancellations happening. It's tough out there.

But here's the deal – a recent study by Small Business Loans Australia says that a whopping 72% of small businesses are sweating over supplier costs, gas prices, and labor expenses. 

Now, with all this economic turmoil hanging over our heads, it's a perfect time to take a step back and look at your business. Check out your processes, see where you can be more efficient, manage that cash flow like a pro, and boost those profit margins. Little improvements in these areas can keep your business on the up and up.

Even in this cost-of-living chaos, your business can tough it out and come out stronger. Just get the right tools and strategies in place, and you'll be ready to grow. For all you tradies out there, understanding your cash flow is the key to making that money!

So, here are some tips to keep your head above water during this wild cost-of-living crisis:

1. Handle your money like a pro I built up my own plumbing business to have 14 staff and 10 vans on the road. The only way I was able to grow that large was by understanding exactly what was happening in real time. Data is king and gave me the ability to see where money was slipping through the cracks - and stop it. 

2. Get those invoices out quick The quicker you send out those invoices, the faster you'll get paid. Don't give your clients any excuses to stall. Invoicing software can be a game-changer and even lets you offer electronic payment options for lightning-fast payments.

3. Ask for upfront deposits When you're dealing with big jobs, aim to get a 50% deposit to cover your material costs. Then, set up payment terms so the rest is due once the job's done. The quicker you do quality work, the happier your clients, and the quicker you get those dollars in your pocket.

4. Keep an eye on unpaid invoices Don't just send an invoice and forget about it. Keep tabs on what's owed and when it's due. Managing your cash flow is all about knowing what's coming in and what's going out. Use those fancy dashboards for a quick look at your financial health.

5. Cut those expenses Tighten your grip on your spending. Know what you're shelling out money for and why. Tools like the one Fergus offers with supplier integrations can be a lifesaver. They automatically keep you in the loop about your suppliers' prices, which is gold with prices skyrocketing. And hey, your team can also chip in with cost-cutting ideas, since they're out there in the field. There are plenty of ways to boost those profit margins without sacrificing quality.

6. Master time management I always say, "Time is money, especially when you're growing your business." A lot of tradies get caught up in the daily grind and forget to work on the bigger picture. Better time management is the answer. Figure out where your time's going so you can plan for growth and focus on the financial and customer data your business collects. Concentrate on what's bringing in the moolah and what's not.

7. Prepare for the good times I've got one more piece of advice: "We know there are still rough patches ahead. But if you can lay down the foundation for a cash-positive, efficient business, you'll be all set for growth when the economy starts to play nice again."

So, there you have it – some down-to-earth tips for keeping your business afloat in these wild times. Hang in there, and keep on hustlin'! 💪

Try Xero and Fergus for yourself

Job management software is designed to help you get more admin done when you're on the go – and get more relaxing done when you get home. Try Fergus for FREE for 14 days to find out how it can transform the way you work.