London’s Small‑Biz Survival Guide in a World of Rising Prices
So you run a shop, a barbershop or a tech start‑up in London and feel like the economy is a rollercoaster that refuses to slow down? You’re not alone. Many businesses are about to hit the “red” zone because they haven’t updated their processes or cut out the hidden, invisible tax that inflation is creeping in.
The Hidden Cost That’s Killing Your Profits
When Azets’ top accountancy folks check a company’s health, they often spot a red flag—profit erosion caused by inflation. Think of it as a sneaky tax that you can’t see on the invoice but feels in every penny you earn.
- Inflation is at 3.5% now, but that’s already built on top of a wild 11.1% spike last year.
- Supply‑chain headaches from the pandemic plus energy hikes after the Ukraine war mean costs are up, and it’s been labelled the “cost‑of‑living crisis” turning straight into a “cost‑of‑business crisis.”
- Many firms have already taken on higher input prices and staff wages—thereby absorbing the cost without passing it on to customers.
And Then There’s NICs and the Minimum Wage Surge
If you’re a UK employer, you’ll be hit by a new 15% National Insurance contribution. That means payroll will climb even higher, and the government says that’s a spend jump that will cost public services a staggering £25.7 billion a year.
On top of that, the minimum wage is going up by 6.7%. Those two changes together are a perfect storm for companies that play the “keep things as they are” game.
Why Businesses Can’t Afford to Stay Stagnant
Stephen Grant, Azets partner, points out that companies that have been successful for years but haven’t smoothed out their internal waste or upgraded their systems are the ones at risk of crashing into the red. He says:
“It’s all well and good to keep doing what worked last year, but in this fast‑paced economy you’re digging yourself deeper holes.”
Take a typical small business with 10‑49 staff. With an average turnover of around £3.5 m in 2019, that same firm would need about £4.5 m in 2024 just to break even—an almost 28% jump in just six years. If they’re already razor‑thin on profit, a handful of extra costs is now the difference between staying afloat and going bust.
What Makes the Difference? A Little Efficiency, Big Gains
The Azets Boost programme is basically a Swiss Army knife for SMEs. It looks at 13 success factors: growth, sales, people, implementation, agility, culture, strategy, profit, leadership, innovation, time management, technology and systems.
Through diagnostics and workshops they help companies spot the weak spots:
- Successfully doubling turnover in 36 months.
- More than 100% profit growth in 24 months.
- Owner working two days a week less while revenue and profit go up.
Those tiny improvements can keep a business competitive against rivals who’re charging a few hundred dollars more for the same service.
Putting a Price on the Invisible
What the British Chambers of Commerce have found: three out of four firms are now raising prices to face these escalating costs. That’s a positive sign—competition is tightening the budget gap, so firms should consider cutting throttles, fine‑tuning processes, and raising suitable prices.
It’s not just about math; it’s about staying hungry and avoiding complacency. When you see the numbers rising, it’s time to shift gears: improve efficiency, sharpen pricing strategies, and get your profit numbers back on track. The world’s priced; you’ve just got to keep moving—maybe with a little bit of humor, a dash of emotional grit and a whole lot of bold execution.
Stay Agile, Stay Profitable
In the end, the ability to keep your business profitable in London’s ever‑shifting economic landscape hinges on how sharply you cut waste, how fast you can adjust your pricing, and whether you let innovation drive your operations. The message is crystal clear: if you’re still doing business the way it was five years ago, you might just be walking back into the red.
