How Will The Coming National Living Wage Rise Affect Your Business? From Roake and Cook

With the current rate set at £10.42, this represents an increase of almost 10% – on top of the 10% rise in 2023.

A lot of rural businesses are labour intensive and these wage rises will result (and have resulted) in significant increases to labour costs.

How much will it impact your business?

Knowing the exact increase to costs will enable planning to start now, rather than once the increase has come into effect.

Accurate forecasts can be produced, based on existing and future staffing plans.

Building these into forecasts for the next 12 – 24 months will show the true financial impact on your business.

It’s not as straight-forward as adding 10% to existing wage costs, although that will at least give you a rough ballpark figure.

Should prices be increased?

A lot of businesses will have to pass increased costs onto customers.

These increasing wage costs come off the back of increased energy prices, fuel prices, and general high levels of inflation.

There is ultimately only so much that can be absorbed by the business, before prices have to be increased.

Any pricing decisions have to be made in consideration with recent and future plans, the type of sector and customer, and a variety of other factors.

There is no one size fits all rule.

Other options

Most businesses are always looking at methods of becoming more efficient.

Whether this is reviewing and improving existing systems, looking to technology, or finding ways to cut costs.

Others may look to new income streams.

Diversification has been key to many rural businesses surviving.

Farms, farm shops and garden centres are perfect examples of this, as they branch into other activities such as cafes, events and renewables.

With only a month until this increase comes into effect, it is important to use that time to forecast the impact on results for 2024 and beyond.

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