Salaries, energy, supply bottlenecks: Business costs remain high

Many B2B companies in Germany continue to feel very strong rising costs in 2023. Even if the situation has eased slightly for some companies since the summer of 2022 and some of the financial burdens could be passed on to the end customers, there is no reason to sound the all-clear. Energy-intensive sectors in particular, such as producers of intermediate goods, are still feeling the effects of higher gas and electricity costs, despite the energy price cap. Supply shortages and the associated higher purchase costs affect all types of companies, and the continuing high levels of inflation are increasing calls from employees for higher wages.

For example, a PwC survey of the engineering sector from the first quarter of 2023 shows how business leaders view the current economic situation and the development of their own businesses. 80 percent of the interviewees predicted that total costs would continue to rise in 2023. For just as many decision-makers, the current rising costs remains the biggest challenge for the development of their businesses in the near future. In addition to the energy costs, the increasing demand for raw materials and intermediate products are having an impact in this sector - around two thirds of survey participants expect inflation in this area, on average nearly 18 percent.


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6 ways to making sensible savings

To maintain economically viable margins, cost savings are essential for most B2B companies. This overview shows possible measures that can quickly and efficiently cut costs without laying off employees or making high investments.

Encourage working from home:  The experience of many companies has shown that employees working from home are just as efficient as in the office. Therefore, it makes sense to incentivise working from home, for example by paying the additional electricity costs. The savings from lower heating and electricity costs in large offices or even a potential reduction of the size of the office and the associated savings in rent can more than cover the cost of home working allowances.

Product streamlining: The product ranges of many B2B companies contain dead stock that involve high storage costs and don't generate the expected profits. These should be cancelled and consistently sold off in times of crisis, if necessary with high discounts. In the medium term, return on sales can be increased this way. Products and services with a higher margin should increasingly come into focus.

Engage an energy advisor: Professional energy advisors for businesses analyse the current energy situation and provide suggestions for optimising energy use. The costs for an energy advisor usually pays off quickly as the savings potential is usually quite complex for companies. Important to know: There is a federal subsidy of up to 6,000 euro for energy advise for SMEs.

Check overhead costs: There are many monthly or yearly fixed costs that regularly come out of the company accounts: These include insurance, account fees, software packages, telephone and other service providers, technical support, or membership fees. All these costs need to be put to the test; it is often possible to switch to a cheaper tariff or to agree discounts.

Reduce irregular expenses: The company-sponsored pizza evening is great, but employees will understand if these events and others are reduced if it means no staff is laid off. Company parties can be cut down on, the fruit bowl removed and for business trips, it should be considered whether they are really necessary, or whether the same results could be achieved by video conference.

Involve employees: Often, employees know better than management where there may be potential for energy savings. These recommendations should be obtained by company managers. Positive effect: Those who are involved in these strategic company discussions feel valued and often show more commitment.