Weathering Inflation Tips and Tricks to Protect Your Small Business from Rising Inflation
It seems like inflation is all over the news these days. From rising gas and interest prices to the housing market and increased food costs, inflation is clearly on everyone’s minds. This can be a brutal hit for all the small businesses already exhausted after the ravages of the Covid-19 pandemic. But the good news is that you can take some simple measures to protect your business against the rising cost of things and harmful inflation.
Want to learn more? Keep reading as Storagelookup breaks it all down.
Raise Your Prices
This is a no-brainer – but the best counterpunch to rising prices is to raise your prices. You likely have higher expenses in procuring supplies and materials and might also be facing a price increase from your vendors. In that case, you will need to increase prices to stay afloat. To do this, conduct a competitive analysis to see what others are charging in the market.
You may well just be undercharging for your products or services, so you can raise prices a little to reach the market rate. Be sure to communicate with your customers about your increased costs and resulting expenses so they have a background into what’s happening with your business. A detailed explanation of the business scenario and your response to it will be a great way to keep them in the loop.
According to Fortune, there are massive labor shortages and increasing labor costs. Labor is likely thus one of your highest expenses as well. The most effective solution to cutting costs in this vertical is redesigning your work structure. You will have to scrutinize what activities are performed, who’s performing them, and how those are performed.
This should give you a good idea as to what activities and tasks are essential and which ones are redundant. You can also determine what is necessary and what adds the most value. From there, you can ensure cost savings by reducing your team, cutting down on some functions, or streamlining certain operations.
Automate All the Way
After eliminating work functions, you will need to automate the rest. Every business has specific redundant tasks that may cause operational bottlenecks. If you’re spending a lot of money on functions that aren’t worth the investment, you’ve likely identified that in the step above. Then, look at various resources and technologies to help you automate the specific workflow. For example, robotic process automation (RPA) software can free up your employees and make them more productive and effective at creating value.
Similarly, investing in accounting software can help you cut down on accounting and payroll errors. If you’re concerned about managing your business financials, choose software that does the work for you. Save using free software with basic features like invoicing and tax deduction (instead of opting for accounting software with a monthly fee).
Automation can also help your company by weathering the ups and downs of inflation. Why? Well, automating tasks will offer fewer supply chain disruptions and increased workforce productivity. All of this contributes to your overall cost savings!
Use Financing to Manage Cash Flow
Small business financing is another effective solution to deal with inflation. Flexible funding options out there will help small businesses weather financial storms. For example, a business line of credit or merchant cash advance can help you sort out cash flow. This will allow you to pay for your business expenses and invest in your company to get the desired results. If you don’t want to be tied down to long-term financing, you can use financing to cover payroll during difficult months or to invest in more stock. Remembering that you have options gives you a financial safety net to fall back on.
One way to make managing cash flow a bit easier is to cut back on expenses. You can do this in relatively short order by downsizing your operation at your physical location and move into a smaller footprint. This saves on utilities and rent, and it’s always possible to rent a storage unit to house items until they can be sold. Find a unit near you by visiting Storagelookup.
A better understanding of your books can be critical in making every penny count. Consider going back to school and taking online courses to sharpen your skills. An online accounting degree, for example, will provide you with the latest number-crunching concepts in accounting, auditing, reporting, and taxation. What’s more, it’s possible to finish getting your bachelor’s degree in just 42 months, all at the convenience of being able to complete coursework wherever you have an internet connection.
Hiring and training employees can be expensive, so you want to prioritize employee retention. Happy employees will mean they are productive and have a better return on investment. It will also ensure you don’t have employees leaving, thus causing operational and workflow issues that can cost you down the line. It will also reduce billable hours spent in training new hires. Create a great company culture to ensure your employees stay with you, with good benefits, days off, and team-building activities. Offering competitive wages and enough work will also be critical to retaining the best talent.
Ramp Up Marketing
When all else fails, sales speak for themselves. The best way to survive inflation is, of course, to have high sales to counteract the effects of inflation. You can ensure this by really prioritizing and ramping up your marketing options. First, start by fully utilizing all the customers and audiences you’ve already built up. Tell them about new products or services, and be sure to launch regular email newsletters to keep incentivized to buy more.
In addition, you may have to invest in digital marketing strategies such as PPC advertising, SEO adaptation, and influencer marketing. While you will have to deal with some cash flow for these strategies, they will be well worth the investment as you’ll see tangible returns. Another option is to spruce up your existing marketing materials such as logos, website banners, or copywriting language. For example, an eye-catching banner will increase awareness of your business and can be customized to fit your website’s overall design and aesthetic.
A recent study by MetLife and the U.S. Chamber of Commerce reported that inflation is currently the biggest challenge to small business owners. With rising prices and customers closely guarding every dollar, it is understandable that inflation is a significant concern. But if you’re an entrepreneur on the ropes, never fear, as making a few simple changes can help you wait out the inflation and move towards business success.
Easily find storage units near you using Storagelookup. Contact us today for more information! (877) 756-6587