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The Big Business Squeeze!

20th January 2022  by Gareth

UK businesses are being squeezed more than ever as we start 2022 with a typhoon of cost pressures landing at the same time. Navigating this phase carefully and wisely is paramount to the medium and long-term success of resellers and MSPs operating in the channel.

Among the most notable cost increases, there is:

Energy

The well documented energy crisis is putting significant strain on businesses up and down the country, with some fearing it could be the breaking point for many. A perfect storm of reduced supplies (stored gas supplies have been hit by an extremely cold winter in Europe in 2020) and increased demand from Asia (in particular China) has resulted in unprecedented cost increases.

https://www.ofgem.gov.uk/energy-data-and-research/data-portal/all-available-charts

https://www.bbc.co.uk/news/business-58090533

Cloud Services

Microsoft and Amazon are introducing significant increases onto businesses. Microsoft has announced a 15 percent rise from March 2022 (with an extra penalty for paying monthly) with similar increases from Amazon.

National Insurance

From April both employee and employer national insurance contributions will increase, by 1.25 percent and 1.5 percent respectively, in order to tackle massive backlogs in the NHS and historic underfunding of the social care sector.

https://www.bigissue.com/news/national-insurance-rise-what-boris-johnsons-social-care-plans-mean-for-you/

Software labour in demand

Software developers and other technical roles are in high demand following the pandemic’s technology drive. This is further exaggerated by a technology skills gap in the UK in particular.

Labour

The rise in the cost of living will have a knock-on impact on pay pressure. Employees will, quite understandably, be seeking larger annual increases than at any time in the last two decades to keep them on par with rising household bills.

Inflation

Due to the various cost pressures and supply chain issues in the national and global economies, UK inflation rates are set to hit a 30-year high, reaching seven percent which is significantly above the Bank of England’s projections of two percent.

The channel is presented with numerous opportunities thanks to massive infrastructure investments and rapidly evolving behaviours of business buyers. However, pricing for communications services is becoming increasingly regulated and, with the influx of the aforementioned costs, channel businesses are forced to walk a tightrope between balancing rising costs with winning and maintaining customers in a price sensitive market.

How Union Street can help

In response, Union Street has launched the ProfitaBILLity service to support partners through this conundrum. The service helps partners to maximise the revenue potential of their customer base whilst driving down costs in their supply chains.

Our billing experts can achieve this by analysing how partners are using our billing software, ensuring billing processes are as efficient as possible, and identifying any areas where revenue is being lost or margins could be increased. They will also provide advice on how Union Street’s software can boost efficiency in the billing and ordering process, ensuring everything is setup correctly and no revenue is missed when provisioning new products and services.

If you’d like to discuss any of the themes covered within this article, or to know more about our ProfitaBILLity service, please don’t hesitate to get in touch with us and we would be more than happy to help.

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