Inflation is one of the most dreaded events for small business owners.
A bloated economy can quickly wreak havoc on a business’s profitability and sustainability. As is the case with any adverse event, those who have a plan will fare better than those who don’t. It’s essential to develop a strategy for confronting the challenges of inflation and surviving the strain it puts on your small business.
1. Strategize Your Staffing
One of the first things you need to do when inflation hits is to assess your current staff. If you have employees who aren’t contributing enough, you can cut costs by laying them off. You should be careful, though, not to let go of any staff members who are valuable members of your team. Instead, invest in these employees by paying them fairly and providing them with enough work.
2. Audit Operating Costs
Payroll isn’t the only operating cost you can cut back on. You can also minimize other operating costs by facilitating remote work, outsourcing some tasks, and eliminating any expenditures that aren’t absolutely necessary. To achieve this, you should conduct a thorough audit of your business’s operating costs, including expenses such as insurance, rent, payroll, and utilities.
3. Utilize Free and Low-Cost Technology & Resources
Your audit may reveal that some tasks can be outsourced to technology. Indeed, the emergence of smart software has made it easier than ever for small businesses to automate processes. You can try free accounting software, for example, to help you reduce the cost of managing payroll. A free program will save you money spent on a subscription, and it can help you keep track of tax deductions, minimize payroll errors, and invoice clients. You can also find great free resources for all things technology, including marketing. Click here if you’re looking for expert recommendations on content marketing, strategies, or creation. Resources like this can save your business a lot of money if you can manage some of your marketing yourself.
4. Consider Your Customers
It’s easy to focus on the impact of inflation as it relates to your own business, but it’s important to remember that inflation is affecting everybody around you, too — your employees, your suppliers, and your customers. According to NetSuite, most companies are raising prices due to the increased cost of supplies. If you choose to do this, you should be mindful of its impact on your customers and take the time to explain why it is necessary for you to do so.
5. Invest in a Customer Data Platform (CDP)
It’s important that you spend your money strategically, especially during a recession. But a CDP is one of those strategic investments you should seriously consider. This software gives businesses a unified view of their customers’ digital lives in order to provide insight into who their customers are, what they want, and how to best meet their needs. You can try this option that provides you with real-time profiles to ensure you have the most accurate information on which to base your marketing efforts.
6. Boost Team Productivity
With the declining sales that inflation often brings, the last thing you need is lagging productivity, too. You need your team to be on their A-game, but the ongoing stress of inflation may make it difficult for them to perform at their peak level. Boost productivity by increasing incentives and acknowledging hard work.
7. Apply for Small Business Loans
Sometimes the financial stress of inflation is too much for a small business to handle. Without some extra help, you might be looking at a dire outcome. Small business loans can help you bridge the gap and maintain enough cash flow to cover operating costs.
Make Ends Meet Even During Inflation
Inflation may test your patience and stress your business, but there are ways to overcome these struggles. When you have a plan in place, you can confidently navigate inflation and ensure that you make ends meet. Cut costs where you can and invest strategically in upgrades like CDP software that will give you a competitive edge in a time when being the best is important to your business’s survival.
Ready to connect with Pittsburgh's professional services community north of Pittsburgh? Join Across North Hills for free and add your business to our growing professional services directory.
Katie Conroy is an Across North Hills contributing writer.
