The situation in the UK & the world is seeing soaring petrol prices which are showing no signs of slowing down. With fuel prices now hitting 200.00p in some forecourts. The effects of rocketing fuel prices on small businesses are reaching critical level.
UK petrol prices have hit record-high levels. We explore the effects on small businesses and examine how you can minimise the impact.
Fuel is a major cost for SMEs
Fuel is already a major expense for many small businesses within the UK, as the cost increases, UK SMEs are going to feel mounting pressure in an already tight economy.
Reducing spend and miles is the fastest and most swift approach to lowing the outgoings. Tough economic times often trigger new innovations and ways of working within companies. This maybe something worth looking at if your business is feeling the pinch from the fuel price situation.
Why are fuel prices increasing?
The global pandemic, Russia and Ukraine and even Brexit are all major contributing factors. Experts have sited a global factor influencing prices, such as the recent Hurricane Ida in North America that has impacted the fuel supply chain.
One of the most un-nerving aspects of the whole petrol situation is that experts are stating that prices will continue to rise with little to no respite.
How will it affect small businesses?
Fuel has such a global effect of the overall overhead of everything. Deliveries, shipments, company cars, fork trucks, sales and operational travel costs. The list is endless.
SMEs need to work around a multitude of challenges during this period of high fuel pricing. This will be extremely difficult for companies that are most directly affected such as those involved in delivery and transportation.
Even if you have no vehicles as a company, you will still likely feel the hit through supply chain. All goods require transporting, unfortunately as costs rise so will the cost of goods in order for companies to absorb some of the increase.
Encourage mindfulness in your employees
One of the biggest ways you can reduce costs is to champion conscious driving habits and vehicle maintenance. Educating employees on the effects of bad driving habits and how that impacts fuel consumption.
Reduce driving in low gears, heavy braking, speeding, and revving. Behavioural changes like these can greatly reduce the cost to a business.
Reduce travel requirements. Post covid, we have all become accustomed to Teams meetings and google hangouts. Why not continue to take the low carbon footprint route. Driving to a meeting that can be held in teams is a quick and easy way to reduce costs.
Can SMEs get help?
Tax deductions are available for all business vehicles which are used for work. This covers not just cars, but also motorcycles, vans and even bicycles.
Be innovative and change for the better
Change can be good!
Now is a great time for SMEs to adapt and change their business models to take into consideration growing economic changes.
Our advice would be to try take advantage of government backing and schemes, look at investing more in sustainable fleets and electric vehicles. Long term these measures will help reduce the effects of future rises.