The American economy is currently experiencing an inflation rate that hasn’t been so high since the 1970s and early 1980s. Media attention is often focused on ultimate consumer dismay and hardship, but small businesses truly feel the strain of this as well. Here are five ways you can help your small business weather the storm of inflation regardless of its causes.
- Find ways to justify price point adjustments where possible. During periods of inflation, businesses large and small ultimately have to pass their increased costs onto customers. However, if you can add value to your offerings without adding cost, you can help prevent consumer sticker shock. Ideas include bundling or de-bundling products and services as appropriate, highlighting your unique qualities in the market, improving customer experience, and offering complimentary services, subscriptions, or warranties.
- Achieve transparency with regard to business spending. To minimize the impact of inflation, ensure that you track company spending in every applicable category. This will make it easier to identify areas in which you can spend less, making your budget leaner and your hard-earned dollars stretch farther.
- Distinguish between strategic and nonstrategic spending. In both good and bad times, it’s wise to have a sustainable cost management system. Decide which costs are strategic (those that are fully aligned with your company mission and maximize shareholder value) and which are nonstrategic. Then make judicious cuts in nonstrategic spending where you can without jeopardizing productivity, value, or employee retention.
- Increase productivity by eliminating time-wasting tasks and processes. Find ways to simplify and automate overly complex or time-consuming processes; use apps and software to automate as much administrative and operational work as possible. (This is especially important if you’ve cut employee hours.) Consider streamlining the products and services you offer and look for ways to improve efficiency elsewhere. Chances are that this will benefit your business outside of inflation periods, too.
- Assess your supply-chain risk and implement strategies to mitigate that risk. In order to be sure you’ll receive adequate supplies on time and be able to move them, it’s important to be aware of your supply-chain risk in case you need a Plan B. Consider alternatives not only to your current suppliers, but to the way those goods are delivered.
Make Your Business Leaner and More Resilient With Next Level Northwest
Enrolling in a business accelerator program and working one-on-one with a business coach is an excellent way to get guidance on coping with inflation and helping your business thrive in difficult times. If you’re a growth-minded small business in the Northwest Chicagoland area, consider applying for admission to an accelerator program with Next Level Northwest.
Next Level Northwest is a business acceleration public-private partnership serving the Northwest Chicagoland region. We support regional and local businesses through collaborative and innovative initiatives to help grow the economy. Download our Program Overview PDF here.
Ready to take your business success to the next level and become a Next Level Northwest graduate? Download and prepare your application following this process today!