These are not the best of times for the economy. As small businesses were trying to navigate the challenges brought about by Brexit, the pandemic struck. Along with that came subdued demand, supply shortages, and staffing difficulties. And now comes the cost of living crisis.

According to Goldman Sachs, the UK economy is expected to enter recession, with inflation at historic levels. Findings from the Bank of England point to a lengthy downturn, while the National Institute of Economic and Social Research warns that recession and high inflation could hit simultaneously.

7M
UK households projected to be living paycheque to paycheque by 2024
5.3M
UK households expected to have no savings at all by 2024

The cost of living crisis will cripple demand, disproportionately hurting small businesses without adequate working capital — especially those that don't sell essential goods or services. But while the immediate future looks challenging, there's a lot small businesses can do to adapt.

Ways to keep your small business afloat

✂️
Cut down on expenses
The first item on your survival checklist: avoid unnecessary expenses. Categorise everything into 'necessary' and 'unnecessary' — ruthlessly cut the latter, and optimise the former.
  • Do you really need more office space or another location?
  • Can you work from home?
  • Can you reduce your business telephone and internet costs?
  • Do you need WiFi or can you manage with a mobile hotspot?
  • Is there a way to optimise your digital marketing spend?
💻
Use technology well
Most modern technology solutions are affordable, scalable and easy to use. If you're an online retailer, technology can help you better target customers, analyse your marketing effectiveness, and increase engagement through cost-effective channels like email and social media. Payment systems, expense tracking, inventory management, and review tools can all reduce workload and improve productivity.
⚙️
Automate administrative tasks
The easiest way to be more efficient is to spend more time on revenue-generating tasks and less on administrative chores. AI can automate workflows, project management and invoice generation. Customer service bots can handle order status and return policy queries. You can also automate your marketing — scheduling content publishing so you're not manually sharing posts on social media.
📊
Review data regularly
Every action of your business generates data. Collecting and analysing it reveals multiple ways to improve efficiency and drive growth. The cost of living crisis may push customers to reduce non-essential purchases — which means your customer acquisition cost will increase. The solution is to reach existing customers and encourage repeat purchases or referrals. Segment customers by purchasing frequency and average spend, then offer customised discounts or referral incentives. Data will also show where you're needlessly spending — if paid ads on a particular channel aren't converting, cut them.
✉️
Focus on customer communication
Increased marketing spend isn't what will help you manage the crisis — it's customer communication. Email is one of the most effective tools here. Segment your audience into frequent buyers and lapsed customers. Offer new products aligned with what regulars usually buy, and send discounted offers to passive customers based on their previous purchases. Beyond sales, consistent email builds community. Share content that adds genuine value — without being spammy.
🌱
Expand your revenue streams
Adding revenue streams doesn't mean investing more money. Consider a subscription service, selling through additional social media channels, offering an online course based on your industry expertise, launching branded merchandise, or starting affiliate marketing. Any of these can offset the effects of reduced demand without requiring significant upfront capital.

How Athlete helps

Athlete is a Shopify app for Etsy syncing that saves you time by syncing orders and customer information across both platforms automatically. Ship from either Etsy or Shopify and the other updates in seconds. It gives you a complete view of all your orders through a single dashboard — including edge cases like upgraded shipping, tax and personalisation notes — so you can focus on running your business, not managing it.

Those who adapt are the ones who will survive

The cost of living crisis seems unavoidable. That doesn't mean failure is inevitable. Even if the going seems good right now, take a hard look at your operations and make changes to optimise resources and grow revenue. Act as if the crisis is already here. Starting early gives you time to execute, experiment, and find what works.

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