With inflation rearing its ugly head around the world, business leaders are grappling with rising costs that inevitably translate into higher prices for customers. Staying competitive in this environment is not easy, but it's not impossible for companies to remain nimble and adapt to these market pressures.

Inflation pressure is being applied on multiple fronts, with the after-effects of Covid-19 restrictions still lingering and the war in Ukraine driving up global food, energy, and oil prices. South African businesses are not immune to these price hikes, forcing them to absorb yet another body blow after more than a decade of poor economic growth.

To survive in this environment, business owners must either find ways to absorb the higher costs or work around them. That is easier said than done for most, given the tight market, fractured supply chains and diminishing consumer spending power.

However, all is not lost. Here are 4 ways business executives can improve their chances of survival in these times, and maybe even create growth.

1. Improve working capital positions

Managing cash flow is essential to any business’s survival. Not only does this allow operations to be run sustainably with minimal dependence on short-term debt, but it also improves agility and bargaining power.

It’s no surprise that debtor management is a top priority for business leaders looking to squeeze out every advantage in tough times. This task is a lot easier for our Commercial Banking  clients using our debtor management solution to free up working capital for better cash flow. Commercial Banking can help you unlock more liquidity based on the quality of your debtors, with a solution that allows you to gain greater visibility of your cash position, and which can also be used by your commercial banker to help you make more informed decisions.

Historical data on customers and suppliers helps to give a more accurate picture of your business and payments cycles, lowering your risk profile. Visibility of your debtors and cash needs, for instance, can be used to extend short-term financing on more favourable terms if we understand the dynamics of your customer and supplier relationships. This information gives us greater confidence in advancing funds, which might also create the opportunity to unlock stock financing, especially if you’re able to secure better terms or discounts for bulk purchases.

2. Optimise your free cash flow

The efficient use of your available cash is as important as making sure you stay cash positive throughout the business cycle. Once again, NCB has services and solutions available to help you do just that.

Among these are our medium- and short-term deposit solutions that allow you to shift free cash into an instrument that can deliver attractive returns without hurting your liquidity. Further flexibility is possible by having a portion secured as a medium-term deposit and the remainder available immediately.

If your business trades cross-border, the current macro-economic climate can present some very challenging scenarios. Whether you are importing or exporting, Commercial Banking has the necessary solutions to enable you to manage your risk in cross-border payments. Your commercial banker has access to the relevant experts in Nedbank to provide guidance in important decisions about exchange control, what type of payment instruments to use, and more importantly, how to mitigate risks that can threaten your cash flow.

3. Expand your network

One sure way to beat the inflation blues is to get ahead of rising costs by increasing profits. The best way to do this is to grow revenue while reducing your costs. You could explore relevant platforms that give your business access to broader networks – exposing you to new suppliers and markets at relatively acceptable costs.

This task has been simplified a great deal by the exclusive relationship Commercial Banking has with Opportunity Network which opens the door to more than 44,000 local and international business owners. The benefit that this arrangement holds is that each of the network members has been carefully vetted by reputable banks, which reduces your trade risk.

The digital platform is easy to use and available on mobile or desktop devices. It helps you match your interest in trade opportunities based on the type and size of deals you’re looking for. As with all relationships, making a success of your participation in the network means doing just that: taking part in events and opportunities that bring you closer to the types of clients and suppliers your business will benefit from.

4. Go digital

A positive development spurred on by the pandemic is the accelerated adoption of digital services by consumers and commercial partners alike. This has significantly improved the acceptance of digital stores and platforms that allow companies to extend their reach beyond their traditional markets.

Importantly, the commercial case to explore these opportunities is equally strong in the B2B realm as it is for consumer-facing businesses. This is evident in the growing base of companies listing on and using Avo Business. The Avo SuperShop provides a platform for you to grow your customer base and supplier network.

As an Avo Business user, you can sell directly to consumers and other businesses, and procure goods and services using the Avo B2B Marketplace. In addition to expanding your addressable market, you can optimise your digital sales with the built-in reporting and analysis tools of Avo Business. Your business has access to this platform and the functionality it offers, even if you’re not a Nedbank client.

Commercial Banking is always developing new services to help your business grow and thrive. Send an email to us at business@nedbank.co.za