Inflation can hit small businesses hard. With rising prices, profits decline, and expenses rise. Many businesses go under during these times. It can be difficult to do what is needed to keep the business afloat while staying true to what clients want and need. Here are 7 strategies you can use to combat inflation.
1. Automate Tasks Whenever Possible
One way to combat inflation is to make the business more efficient. Automation can increase both efficiency and productivity. For example, a system that automatically generates price estimates will make creating proposals a much faster process. Simple enhancements, such as using form fields on long documents to fill in the title, header, and footer information, can also help.
Another strategy is to use templates for emails, messages, and forms that are commonly used. That way, members of the business will spend less time writing generic content.
Find small ways to automate tasks without sacrificing quality to save time and money in your business.
2. Stay Organized
Being organized is always important when running a business, but it is even more critical when inflation is high. Staying organized means increased efficiency and easier problem solving, both of which help keep profits high. It may be time to try a new project management system or improve on an existing procedure to optimize the most effective organizational tools.
3. Stick to a Strict Budget
Inflationary periods are not the time for unnecessary spending; sticking to a budget is more important during this time than ever! Re-evaluate your budget to find areas in which money can be saved or spending can be cut. However, do not compromise customer service, product condition, or employee well-being. Only cut spending in areas that will not greatly affect the consistency and quality of the business. Staying as consistent as possible is key to keeping existing clients during inflation.
4. Hire and Retain Skilled Employees
During an inflationary period, it may be tempting to cut expenses related to employee morale, such as benefit programs and mental health resources. But, this is counter-productive. Hiring and retaining experienced, efficient employees is incredibly important during inflation. All of the work required to stay organized, stick to the budget, produce marketing materials, and set up automated systems cannot be done by a single person. Treat your employees well during an inflationary period, and the people with the skills to keep the business afloat will stay with the company.
5. Find Creative Ways to Increase Profits
Perhaps your product solves a problem that had not been originally anticipated. Now is the time to market that! Coming up with new advertising angles and even new features or versions of a product will help sell more units during times of inflation. Products that are necessities may have lower sales during these periods, but they do still sell, so marketing aspects of the product that make it a need can boost sales.
6. Market to Niche Groups
Higher inflation makes consumers buy less. Your main market may not be interested in purchasing your product if the price rises or if their budget becomes tighter. However, it is also possible for new markets to open up. If you are able to keep prices relatively low and continue exceptionally supporting clients, other markets will choose your business over the competitors.
If your primary market is not buying enough of your product, it may be time to try marketing to different groups. Try making up for the loss in sales by marketing to multiple smaller-niche customer bases.
7. Last Resort: Raise Prices
Sometimes, raising prices cannot be avoided. If all else fails, higher prices might be what is required to keep your business going. Be sure to tell your clients why the prices are changing so that they will be understanding, instead of taking their business elsewhere. Also, only raise them as much as required for you to continue your business. A price that jumps too high will scare everyone away, even the customers who sympathize with you.
Conclusion
Inflation can create hard times for businesses and individuals alike, but this misfortune will not last forever. Use these 7 methods to make life easier for your business and your clients during inflation. You might even discover new strategies that improve your business in the long run.
