How To Address Inflation At Your Business
About one in three small businesses say inflation is their biggest challenge, according to a recent study from MetLife and the U.S. Chamber of Commerce. To cope with inflation, 67 percent of small businesses have raised prices and 41 percent have decreased staff. As labor and other costs rise, you may find yourself in a similar situation.
Wondering how to combat inflation’s effect? Keep reading this issue of Promotional Consultant Today. We share guidance from journalist Julie Bawden-Davis on steps you can take to ease inflation at your promotional products business.
Streamline and automate where you can. With rising costs, now’s a good time to look at your company’s processes. You might find an area where you could automate and free up your team’s time for more income-generating work. For example, you may be able to automate scheduling when it comes to booking client or prospect meetings.
Evaluate your profit margins. When inflation has you feeling stretched as a business owner or leader, make time to analyze your profit margins. It’s important to know how much of every revenue dollar is flowing to the bottom line. Examine your costs and identify the margins you are facing. You can then brainstorm ways to increase those margins while still providing the service and products your buyers expect.
Buckle down on productivity. Remember that the faster and more efficient your team works, the higher your profit margins will likely be, Bawden-Davis says. Try using apps or tools that show you where your time is going. This can help you and your team cut back on wasting time during the workweek.
Look for ways to save. Another way to deal with inflation is to scale back where you can. Maybe this means moving to a smaller office and incorporating more of a hybrid work model. Bawden-Davis says you could also check whether your company pays for products or services that go unused, and then cancel those subscriptions or items.
Get core supplies now. With rising prices and escalating supply-chain issues, stock up now so you’re prepared. You may also pay less than you might if you waited to buy months down the road. Another idea? Consider negotiating contracts with business partners, as prices are likely to continue increasing, Bawden-Davis says.
Cautiously raise prices. Announcing rate hikes to your customers isn’t ideal, but it can be a helpful way to address inflation’s effect on your company. Instead of rolling out across-the-board price increases, Bawden-Davis says it’s better to raise prices slowly and strategically in modest increments. Choose areas where your buyers are least likely to notice, she says.
Inflation can be unnerving to any business owner. You can work to stay ahead of inflation and mitigate its impacts on your company by following the guidance above.
Compiled by Audrey Sellers
Source: Julie Bawden-Davis journalist and blogger who specializes in areas including business and personal finance. She is the author of 12 books.