Financial challenges faced by SMEs in 2022
In previous blog posts we have been looking into various key challenges being faced by business owners in 2022, including employee engagement and motivation, challenges with supply and logistics, and the battle to ensure you attract and retain the talent.
In this post, we will focus on the financial challenges that businesses might be currently having as a result of the effects of the energy crisis, increasing fuel costs, and overall inflation.
The Energy Crisis
This year energy and fuel are in higher demand, and therefore the higher the demand, the bigger the increase in price will be. Due to this, energy prices in 2022 have hit an all-time high.
What is the cause of this demand and what is impeding the supply?
- The post-lock down “scramble”
Over the last two years, due to of the Covid-19 pandemic, demand for fuel and energy was minimal, businesses stopped their operations and the public was forced to stay indoors. Once things started getting back to normal, and since energy and fuel were not stored during the lock down period, suppliers are now struggling to meet the high demand that has ensued.
- Ukraine-Russia conflict
One of the main suppliers of gas to Europe was a Russian company called Gazprom, and due to current situation trading was stopped with any allies of Ukraine resulting in the need for businesses to find new suppliers and greatly raising the demand.
- Inflationary pressures
Businesses have been experiencing financial pressures stemming from inflation and its impact on gas prices, costs for supplies and an increase in wages. Posing itself as one of the biggest challenges for businesses, this has led to; problems with the supply chain, forced reduction in staffing, pay pressures, decline in profits and cashflow, spike in logistical costs and the mental and psychological strain that resulted from dealing with all these issues.
What can you do to keep your business flourishing?
Despite the challenges being faced by small business owners and the situation seeming bleak, help is available to ensure you can emerge from this stronger and more successful. At times it is difficult to take a step back and look into your business and assess the needs that need to be addressed.
Your business can greatly benefit from a free Business Health Check that will help you with identifying which areas of your business need support and the best course of action to take to tackle the issues. Get in touch on firstname.lastname@example.org or call on 79903685 to learn more about how we can help you with overcoming such challenges.
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