How SMEs can survive the petrol increase
When the department of energy announced another massive fuel increase (effective from yesterday), it impacted rising operating costs which could present a cash flow challenge for some small business owners.
This is according to Christo Botes, executive director at Business Partners Limited who said that many SMEs still fail every year as a direct result of cash flow challenges that could have been easily avoided with the better management of operating costs.
To do this, small business owners should review their budgets and make any necessary amendments in order to accrue for these increases going forward, explains Botes.
“Once these additional increases are allocated for, sensible ways should be considered on how these costs can be reduced. Business owners should also be aware of the fact that suppliers might pass on their own price increases to the SMEs buying from them.”
Botes adds that with these increases, it is now more important than ever for small business owners to keep a firm grip on the management of the business’ finances and to find innovative ways of managing their cash flow without resorting to additional debt.
“Businesses will always be faced with unexpected increases, it is therefore imperative for small business owners to always understand the ins and outs of their businesses, plan for this potential risk and have mitigating initiatives to turn adversity into opportunity,” he says.