How to grow your business, despite rising costs

busines person growing business

Australian business owners are certainly made of tough stuff.

Just when it looked like things were starting to ease after the challenges of the last couple of years, along comes surging inflation, supply chain bottlenecks and rising interest rates.

Yet despite these notable headwinds, NAB reports businesses are increasingly optimistic, with its latest business sentiment index rebounding in July, rising five index points to be back above the long-run average. Business conditions also remain well above average, with sales and profits holding up in the face of the highest inflation rates seen for decades.

NAB group chief economist Alan Oster said businesses were continuing to report that conditions are strong.

“While some of the real-time data we look at is showing signs of softening, there are no signs of that in the survey with demand at a really high level. Importantly, the strength is showing up across the board in terms of industries and across the country,” he said.

Rising costs are driving innovation.

Meanwhile, new Commonwealth Bank research reveals a robust, positive outlook among Australian businesses, despite ongoing concerns such as inflation and supply chain issues.

But rather than viewing these pressures as unsolvable problems, many businesses are innovating and adapting their way through them – with one in three anticipating these activities will result in higher profits within the next 12 months.

How your business can grow in an inflationary environment

Surging inflation can easily eat into your business’ profit margins – especially if you are reluctant to pass on increased costs to consumers. This, in turn, can affect the viability of your business.

With that in mind, what can you do not just to ride out the storm but actively thrive? Here are seven ideas:

  1. Identify opportunities to diversify your supply chain, including procuring closer to home
  2. Review your business finance rates and actively consider refinancing if suitable
  3. Streamline and automate routine tasks so you can do more with less
  4. Use business finance solutions, such as a line of credit facility, to help you manage cash flow
  5. Invest in new vehicles, equipment or plant to improve efficiency and productivity
  6. Expand or diversify your product ranges to grow your customer base
  7. Outsource activities to help lower costs and address labour shortages

While rising costs and price inflation will drive many businesses to tighten their belts, the reality is that you often have to spend money to make money. With many businesses facing cost pressures, it’s vital to ensure your business financing works to your advantage.

An expert commercial finance broker like NMC Finance can review your business loans to make sure you’re on the best deal possible and that your finance facilities work with, not against, your needs.

Looking for a business loan or asset finance? NMC Finance is an experienced commercial finance broker and can help. Contact Nathan Coad on 0498 766 639 or to find out more.

* This blog is intended for general informational purposes only. For personalised advice tailored to your unique financial situation, please contact NMC Finance.

FREE Guide to Building a Property Portfolio

Download our FREE GUIDE and learn everything you need to know from How to Start, Find, Afford, Grow and the Risks Involved in Building a Property Portfolio.