Inflation doesn’t just affect the economy and your wallet; it can also affect your business in ways you might not realize at first glance. As inflation continues to rise, it’s crucial to pay attention to how this can affect your small business and its success over time, with these six tips on keeping your small business growing despite inflation.
1) Stay lean
Run your operations and administration as a continuous experiment. Stay efficient and effective by using lean techniques. Lean manufacturing is all about reducing waste and increasing efficiency, translating into cost savings for you, your employees, and ultimately your customers. For example, if you’re spending too much time on routine tasks such as filing paperwork or calculating product costs, try streamlining these processes to take less time.
2) Get rid of low-margin products/clients if need be
Inflation through your supply chain and payrolls will make products and services more expensive, and those costs can sneak up in ways that might not be so easy to notice. Reviewing your product margins will bring new light to your business plan and help you make business decisions such as pushing a particular product more than others, running sales promotions, or discontinuing a product altogether if no longer profitable.
3) Promote existing services/products
After re-evaluating your margins, adjust your marketing plan to promote the services or products with the best gross profit margins. Selling more of these products will positively impact your business’s bottom line while becoming more resilient.
4) Maintain high customer satisfaction
Keeping your customers happy will keep them coming back. It’s not always easy, but keeping in touch with your customer base to be clear on the progress they want to make by using the products or services you provide will keep a clear connection between your clients and business.
5) Readjust budgets/prices to stay ahead with inflation as much as possible
Keeping an eye on how inflation affects your bottom line is essential for making sound financial decisions regarding hiring, equipment investments, and anything else where cash flow matters. In short: think about what you’re doing to hedge against inflation when planning for growth over the next few years.
6) Find new markets, sectors, and geographies to expand into at this time
Entrepreneurship means constantly searching for ways to improve your business and create new ones while enhancing the lives of others (be your customers, employees, or communities). Always be open to testing new ideas. Sometimes the best ideas are hiding just behind your current product offering. Exploring adjacent or complementary business ideas to your current one will give you a competitive advantage relevant to a new player entering that space. Be brave!
