There is no doubt that the UK is gripped in a growing financial crisis at present, with real household disposable income per head down by 2% during the first financial quarter (year-on-year).
This highlights the challenges facing households and consumers in the current climate, particularly in cities like London where the cost of living is already disproportionately high.
This is also a concern for businesses who are looking to expand into the capital, who must also cope with rising operational costs while also dealing with a lower consumer spend. In this post, we will look at how businesses can rise to this challenge and continue to grow as the economic climate worsens.
- Consider the Importance of Flexibility
One of the biggest issues facing businesses in the capital is the cost of securing premises, particularly given the presence of high rental rates. With less demand for their products and minimal revenue to reinvest into the venture, businesses need to reduce these costs in order to maximise profits.
One way in which they can achieve this is to seek out rolling and temporary contracts on serviced offices spaces throughout the capital. This negates the need for a long-term financial commitment, while it also allows businesses to scale their venture in real-time and according to incoming revenues.
- Embrace the Temporary Workforce
On a similar note, businesses can also look to reduce the cost of expanding into London by embracing the notion of the temporary workforce. This means that while you continue to employ a core team of full-time staff and stakeholders, you also seek out reputable contractors to offer their services according to the demands of each individual project.
Not only does this reduce your annual wage bill and optimise efficiency, but it also minimises the amount of full-time workers who need to reside in the capital and therefore require inflated wages to support their cost of living.
By employing skilled and competent contractors from across the UK, you can arguably reduce your wage bill while maintaining a fully-functional team of staff.
- Get Your Pricing Right
While the cost of living often causes huge issues in the city of London, it also offers considerable opportunities for flexible and agile businesses.
More specifically, London's consumers are more willing than most to pay a little more for proven quality, so it is important that you promote viable and fair pricing that reflects the true nature of your product (or service).
This is particularly true if you are overtly marketing a quality product, as your pricing must match the value proposition while also delivering the necessary profit margin.