Issue #67 - Moving on up? 📈
What do higher wages and inflation mean for SMEs? | How do interest rate rises affect small businesses? | How to pay yourself as a small business owner | Walking the Dog | Tunes | Words | More
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What do higher wages and inflation mean for SMEs? 🤔
Welcome to Issue #67 of The Backbone - the fortnightly newsletter from Bionic.
Wages are on the up! According to figures from the Office for National Statistics (ONS), the three months to July saw average weekly earnings growth rise to 8.5% in annual terms.
This is an increase of 0.1% from the previous month and marked a new 20-year high (save for distortions during the COVID-19 pandemic).
But what does that all mean for micro business and small business owners?
Let’s look at the major downside first - it could lead to even more interest rate rises. The Bank of England is expected to put interest rates up again next week. If wages are growing then it could see them double down on interest rate rises as a way to bring down inflation. Andrew Bailey, Bank of England Governor, has already said he’s worried about a possible wage-price spiral that could see high inflation continue for longer.
This could have several implications for small business owners - although it could mean more people through the door, staff might need higher wages to cope with an increased cost of living. If interest rate rises continue, then mortgages, rents, and other borrowing will become even more expensive and place even more financial pressure on small business owners.
The plus side is that higher wages are a good indicator that inflation could be slowing down as earnings are rising at a faster pace than prices (for comparison, inflation was 6.8% in July).
If inflation is slowing down and wages are rising, it could mean people have more money to spend at your business. It’s not always easy to, but it’s definitely worth focusing on the positives.
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How do interest rate rises affect small businesses? 💸
It looks like the Bank of England will be putting interest rates up again next week. But what does that mean? Why are they doing it? How could it affect your business? And is there anything you can do to compensate for the cost of everything going up?
How to pay yourself as a small business owner 💷
As a business owner, keeping things ticking over should always be your number one priority. But this can mean your own pay packet is well down the list of priorities. Only once things are running like clockwork - your rent is up to date and staff are being paid on time - can you even begin to think about paying yourself. But how much should that pay packet be?
🗣 SHOUTOUT
#SmallBusinessStory - Walking the Dog 🐕
Bionic spoke to Jane Bellamy who runs her own dog-walking and pet-sitting business in Tadworth, Surrey. We found out how she started, why she thinks it’s important to support fellow micro businesses is important and who her favourite furry friend is.
Bionic: How did you start your business?
Jane Bellamy: I started the business because of Covid really. Dog walking as a career wasn’t something I’d ever thought of before. I lost my job during the pandemic, and it made me rethink what I’d like to do with my life, I decided I’d like to work with animals! I started getting into my local community, posting on this social media group called NextDoor to see if anyone wanted a dog walk, I found one dog-walking client and then another and another, and it built up.
B: Why do you think it’s important to celebrate SME owners?
JB: I think it’s down to our culture in a way. You know, you’d go to the local butcher to get your meat for Sunday roasts, the local high street is part of our heritage. Supermarkets have gotten too big, and you see a lot of small businesses popping up now. People admire people who run small businesses.
B: Is there anything you wished you’d done differently at the start of your business journey?
JB: Chatting with someone who had a similar business would have been helpful. Someone who was willing to give some tips on how to build a website and market yourself. Running a business is transforming all the time, especially with taxes and things like that. You need to know the thresholds and keep receipts for items you buy for your business. It would have been useful to learn about that kind of stuff first.
B: What advice do you have for other SME owners just starting out?
JB: I think it depends on the business. I mean, I was lucky that I’d always had horses myself, I’ve had animals all my life. From that point of view, I’d had experience already. But I’d say whatever your skills are, they’re the things you to need to look at and grow, even if you don’t think they’re ‘business worthy’. Skills you don’t necessarily think are skills might be just what someone is looking for!
B: Who has been your favourite furry client?
JB: I couldn’t choose! I’ve got such lovely clients, it’s really hard to pick. They’re all really different but I treat them all the same - as if they were my own pets. Each animal has their own challenges, at the moment I’m housesitting and looking after a lovely dog called Charlie who is blind and has dementia. But he’s so sweet, although he keeps bumping into things, bless him. But, above all, it’s about keeping clients and pets happy and treating them as my own.
Check out more from this small business story at Bionic.
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Playlist 🎶
Steph, Digital Marketing Manager at Bionic, has picked a playlist to help us all cling to the last remnants of summer. From the Cascades of Colour-sounding opening of Mirror by Jako Diaz and Margaret to the 80s-inspired sign-off of Purple Night from Cezaire, Chilled House 2023 will transport you to the heady days of summer (those couple of weeks in May) or have you dreaming of Balearic closing parties.
Podcast 🎙
Chosen by Chloe, CRM Manager at Bionic, This is Love is a that podcast aims to decode the mystery of how our romances, obsessions and relationships drive us. Episodes include things like a city in Northern Italy where everyone decided to stay quiet to save something beautiful, a really terrible orchestra, and the dramatic and surprisingly relatable relationship between a powerful young wolf and the small, elderly wolf who had raised him.
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