As a business owner, you know that inflation can have a significant impact on your bottom line, because it raises the cost of goods and services while simultaneously eroding profit margins.
But what can you do to survive in this challenging economy?
In this blog, we’re sharing some proven tips to help you stay ahead of the curve and protect your business from the effects of rising inflation.
One budget you SHOULDN’T cut!
Many people think that cutting their marketing budget is a good way to save money. However, this is often a mistake.
In today’s economy, it’s more important than ever to have a strong marketing budget and marketing strategy.
We know that inflation is eating away at the purchasing power of consumers, and businesses need to find ways to stand out from the competition.
But when you cut your marketing budget, you’re immediately at a disadvantage.
Not only will you have less money to spend on advertising and promotion, but you’ll also have less money to invest in market research and product development.
In the long run, this WILL lead to a decline in sales. So don’t be tempted to cut your marketing budget in an effort to save money—it will only cost you more in the long run.
Now that we’ve got that out of the way, let’s look at 7 ways your business can survive inflation.
7 ways your business can survive inflation
1. Review and cut down on business expenses
Expenses are something that every business owner has to keep track of because they can quickly spiral out of control if they are not monitored carefully. Expenses can include things like office supplies, travel and meeting expenses and technology (software and hardware).
There are a few ways to cut down on expenses. One way is to review expenses regularly and look for ways to cut costs. Another way is to get quotes from multiple vendors before making a purchase. Finally, it is important to try to negotiate better deals with vendors. By taking these steps, businesses can save money and improve their bottom line.
2. Review your prices regularly
In order to stay ahead of inflation, you need to be proactive about reviewing your prices on a regular basis. This way, you can make sure that your prices are still in line with the current market conditions.
Once you’ve reviewed your prices, it’s important to make adjustments where necessary. This may mean raising your prices in order to keep up with the rising cost of goods and services.
One way to raise your prices whilst still enticing people to purchase from you, is to create bundles or deals that increase the overall order value, but saves the customer money because they are purchasing in “bulk”.
3. Re-negotiate payment terms
When dealing with new clients and new suppliers, try to set payment terms that benefit your cash flow positively.
Try to get extended payment terms from your suppliers (60- or 90-day terms) whilst keeping new clients to a 30-day payment window. This will help you stay in the “green” when it comes to having a healthy cash flow.
4. Improve your sales team and processes
If you’re not constantly improving your sales team and processes, you’re falling behind. That’s because the cost of doing business goes up every year, thanks to inflation. In order to keep up, your business needs to get better at generating revenue.
That means constantly evaluating and improving your sales team and processes. Otherwise, you’ll find yourself struggling to meet targets and projections.
So how can you improve your sales team and processes?
Start by setting clear goals and objectives. Then, track progress and monitor performance against those goals. Finally, make adjustments as needed to ensure that you’re always moving forward.
By taking these steps, you can ensure that your sales team and processes are always improving.
Bonus tips: regularly train your team members on the latest selling techniques, implement new technology to streamline your processes, and offer incentives to encourage higher levels of performance.
And note, an incentive doesn’t need to be a monetary reward! See point 5 below…
5. Retain high-performing staff
Every business is only as good as its employees. That’s why it’s so important to retain high-performing staff, even during times of rising inflation.
Highly skilled and experienced employees are the backbone of any successful business because they make the sales and they deal with the customers. They are the ones who help to drive innovation, meet deadlines and deliver quality results.
In today’s competitive business environment and especially during times of high inflation, it’s essential to retain a team of dedicated workers who are committed to your company’s success.
You can reward staff who meet or exceed tasks/targets with time off or work from home days because often the flexibility in their schedule is far more valuable to them than a once-off payment. Alternatively, offering profit-share is a great incentive that only rewards staff when sales are made.
6. Stay ahead of the competition by continually improving your products and services
The key to success in business is to always be ahead of the competition. And to do that, you need to continually improve your products and services so that you can offer your customers the best possible value.
You want people to rave about your products and services to their friends, because referrals are free and often the lifeblood of many small businesses.
Offering an exceptional standard will set you apart from the competition, and help you to inflation-proof your business. When consumers are tightening their purse-strings, they will be even more selective about who they purchase from, so make sure that you are top of mind.
Ensure that everyone who has any sort of interaction with your business has a pleasant experience, no matter what. Train your staff and set the expectation that your customers are to be treated like royalty.
It’s the difference that will make the difference.
7. Look out for new opportunities
Despite inflation, it’s important to keep an open mind towards new business opportunities that may arise. By definition, business opportunities are usually time-sensitive, so if you’re not open to new possibilities, you may miss out on a chance to make some quick profit.
However, it’s also important to be careful and do your research before investing any money. There are many scams masquerading as business opportunities, and if you’re not careful, you could end up losing a lot of money.
But if you approach new opportunities with caution and an open mind, you’ll be in a much better position to take advantage of them.
It’s also important to have a good support network, so you can bounce ideas off of other people and get feedback. New business opportunities can come from anywhere, so it’s important to be open to all possibilities.
Closing thoughts
Inflation is a hard reality that we all have to face. The good news is that there are ways to protect your business and ensure its survival.
By implementing some or all of the seven tips we’ve shared, you can help shield your company from the negative effects of inflation.
Remember, it’s never too late to take action; start today and see how your business can thrive in this challenging economy.
What steps will you take to insulate your business from inflation?
