Tips For Small Business Owners On How To Combat Inflation
In 2022, we experienced an annual inflation rate that averaged more than 8%. Unfortunately, rising prices present challenges for small business owners. Not only does inflation eat into your profits, but skyrocketing costs can also leave you cutting corners in ways that might have a negative impact on your customer base.
Today, Liburd Gallagher Accountancy Ltd. shares a few tips and tricks that you can employ starting today to help you cut costs and weather the storm of inflation without cutting corners.
Utilize Customer Data to Target Your Message
Data drives businesses both large and small. It allows you to customize your message to your target audience, meaning you’re spending less money on marketing and messages that fall upon deaf ears. If you’re looking for solutions related to customer data platform insight, do your research first. Look for a CDP that offers up-to-the-minute information on your existing customer profiles. This means you can seize each moment since your insight is current, relevant, and timely.
Look for Ways to Improve Production
The efficiency of your production lines has a direct impact on your profit margin. UpKeep offers several recommendations on how to measure and boost your productivity, including examining your current workflow and setting realistic expectations and standards. To improve things, start with your communication, and then make sure that your employees are well rested and treated well, which will ensure the highest possible employee morale.
Choose Between Outsourced and In-House
There are many things that your business does that you can only do in-house. Production is one of these. But there are many other tasks that you can outsource, including information technology services. When you outsource your IT, which includes things like cybersecurity and web development, you can scale up or down quicker and you don’t have to go through the expense and time of onboarding and new hire training.
Marketing is another aspect of your business that you should consider outsourcing. When done right, marketing can seriously increase your sales and revenue, so if your internal team is struggling, try outsourcing. You may need PDF tools to help you with streamlining, well, everything during this process, but luckily they are free. Find tools that edit, split, merge, and convert PDFs online and use them to communicate effectively with your new marketing team.
Look for Complementary Revenue Streams
As a business owner, you likely have a niche. That does not mean that you can’t piggyback off your specialties and add new revenue streams to your business. One example that the IncFile blog uses is selling branded leggings or water bottles if you’re a fitness instructor. You might also consider utilizing paid subscriptions to your website or selling your services to similar businesses (in different markets, of course) as a consultant.
Adding complementary revenue streams can be very lucrative in the long run, but you may need funding to get things started. In this case, look into small business loans, but know that lenders will look at your credit history before deciding whether or not to offer you a loan. It’s best to check your credit score and history before applying because each credit inquiry will also ding your credit score. If your score is too low, wait to apply and seek alternative funding sources.
Stock up on your office supplies and raw materials when you can. According to Staples, in addition to cost savings, buying in bulk helps you reduce packaging waste while you save time. Just as important, having supplies on hand means that you are less likely to run out at the beginning of that big customer order.
Invest in Your Best Employees
There’s a good chance that your employees are going to ask for a raise as inflation affects their personal budget, too. This is not the time to start a round of layoffs if you can possibly help it. Instead, look for other ways to save so that you can invest in your best employees. Remember, when you treat them well and pay them a fair and just wage, they’ll treat your customers better, which can have a long-lasting, positive effect on your bottom lines and may even attract new customers.
Implement a Plan for Inflation
While the inflation rates have dropped a bit in the first quarter of 2023, prices across the board continue to rise. As a small business owner, you have to fight back. Between using a customer data platform to best target your message to outsourcing and even buying in bulk, the tips above can help you weather the storm of inflation so that you can move through 2023 with your budget intact.
Liburd Gallagher Accountancy Ltd. can help you navigate the financial waters of small business ownership. Contact us for your free 30 minute consultation today!
Written by Spencer Gray
Spencer Gray is a self-made computer programming whiz kid. When he was in high school, he started his own computer programming business and learned some invaluable skills in the process. These skills – like accountability, money management, and time management – helped him get accepted into his top college of choice. Now Spencer is on a new mission: to encourage today’s high schoolers to start their own business. With his website, Teenpreneur, Spencer wants to show teens that there are countless benefits to being your own boss.