For many business owners today, managing surging inflation in a new experience. The responsibility and commitment to operating and growing a fiscally successful and sound business can be daunting, even more so during these challenging times. Business owners need to be creative in their approach. Inflation can have an impact on everything from materials, wages, production, and profitability to customer satisfaction.
Combating the effects of inflation can be difficult, but the good news is you have options you can take to protect your business and improve your bottom line.
We have put together 5 tips to help business owners just like you manage inflation:
#1 Revisit Your Finances
This might be a great time to refinance debt on an existing business loan. Refinancing a variable interest rate to a fixed interest rate can limit the danger posed by adjustable rates rising in the future. While credit cards should be used sensibly, cash-back credit cards and airline reward cards can be worthwhile for a business owner. If you’re going to use a credit card, use one that gives value back to your business.
#2 Cut Regular Expenses
As inflation continues to surge, business owners need to be responsible and complete a comprehensive review of every expense. Focus on eliminating things with minimal ROI, cancel subscriptions that you aren’t utilizing at full value, and look to downsize your office space if your staff has shifted to remote work.
#3 Review Business Operations
High inflation has motivated many business owners to re-evaluate their business operations and think of ways to be more efficient, productive and cost-effective. Investing in business technology might make sense. Review workflows and look to simplify processes. Research software that can streamline customer relationship management, inventory and project management without causing disruptions for your employees and customers.
#4 Explore Supply Chain Alternatives
The supply chain issues and unpredictability continue for most businesses, and business owners need to be proactive. Explore alternative suppliers, preferably in different locations. Setup your business to have the assurance of maintaining your stock even if your preferred supplier can’t fulfill your businesses needs. Look at purchasing as much as you can handle in one shipment so you do not have to order as frequently and keep getting hit with price increases, and delivery surcharges. Stay proactive to be informed in regards to possibly disruptions and be transparent and communicate quickly with your customers, keeping them informed.
#5 Raise Prices Judiciously
It is safe to say that most business owners raised prices over the past year. While not the most ideal approach to retain and add new customers, you can avoid turning customers off by raising prices slowly and strategically. Explore things such as offering extra services, rewards, discounts, and focus on strengthening your customer service. In your communications tell customers that inflation is affecting all businesses and you’ve tried to keep the same prices as long as you could, but you’re adding value wherever possible and appreciate their business.
Inflation can be tough on small businesses, but the right strategies and resources can help owners get through it and emerge even better and stronger.
Want to learn more and explore other strategies that MCDA CCG has implemented for our customers? Call us today (657) 258-0577 for a free no -obligation discussion.
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