How to Protect Your Margins in the Current Oil Price Crisis
By Sue Hirst
If you’re running a small or medium-sized business in Australia, you’ve likely started to feel the pressure.
Fuel costs are rising. Suppliers are increasing prices. Delivery and logistics are becoming more expensive. At the same time, customers are becoming more cautious with their spending.
All of this adds up to one thing — your margins are being squeezed.
The challenge is that this doesn’t always happen overnight. You may still be busy. Revenue might look steady. But underneath, profits and cash flow are tightening.
So what should you be doing now?
Don’t Wait for Your Accounts to Tell You There’s a Problem
By the time your financial reports show a drop in profit, the issue has often been building for months.
Instead, take a step back and ask:
- Have your costs increased over the last 3–6 months?
- Have your prices kept up with those increases?
- Are you working harder but seeing less return?
If you’re unsure, it’s time to review your margins now — not at year-end.
Review Your Pricing — Even If It Feels Uncomfortable
Many business owners hesitate to increase prices out of concern for losing customers. But in the current environment, avoiding price adjustments can quickly erode profitability.
Your costs are already increasing. If your pricing doesn’t move with them, your margins disappear.
Start with practical steps:
- Review pricing by product or service
- Increase prices where margins are under the most pressure
- Focus first on areas where customers are less price-sensitive
Customers are often more understanding than expected — particularly when changes are communicated clearly.
Get Clear on Your Cash Flow
Profit and cash flow are not the same. You can be profitable on paper and still run into cash flow issues.
In the current environment, timing matters more than ever — when cash comes in, when payments go out, and how rising costs affect both.
Put together a simple 8–12 week cash flow forecast:
- What cash is coming in each week?
- What needs to be paid?
- Where are the potential gaps?
Without this visibility, decisions become reactive rather than planned.
Look for Quick Cost Wins — But Be Strategic
Cost control is important, but cutting blindly can create bigger problems.
Take a targeted approach:
- Review supplier agreements and pricing
- Identify unnecessary subscriptions or overheads
- Address inefficiencies that are costing time and money
Focus on reducing waste — not cutting capability.
Plan for “What If” Scenarios
Uncertainty around oil prices and global conditions means things can shift quickly.
You don’t need complex modelling — just consider:
- What happens if costs increase further?
- What if sales slow down?
- What if a key customer delays payment?
Having a simple plan for these scenarios helps you respond early, rather than under pressure.
Don’t Try to Manage This Alone
This is a challenging environment, and it’s moving quickly.
The businesses that are holding their margins are the ones that:
- Review their numbers regularly
- Act early, not reactively
- Seek external guidance when needed
Getting a second perspective can often highlight opportunities or risks you may not see day-to-day.
How We Can Support You
Right now, many Australian SMEs are facing exactly these challenges.
This is where CFO On Call supports businesses by providing practical, commercially focused financial guidance.
We can help you:
- Understand where your margins are being eroded
- Review and adjust your pricing strategy
- Build a simple, effective cash flow forecast
- Identify quick wins to improve profitability
- Plan for different scenarios so you’re prepared
If you’d like a practical review of your business, talk to a CFO On Call today. No jargon, no lengthy reports — just clear, actionable advice you can use straight away.
A Final Thought
You don’t need to have all the answers right now.
But doing nothing is the biggest risk.
Small, early actions — particularly around pricing and cash flow — can make a meaningful difference over the next 6 to 12 months.
