The Business Survival Guide To Inflation
As a business owner, there is no doubt that you have keenly felt the recent effects of inflation. While it can be frustrating, the unfortunate truth is that inflation is a reality of our economy that must be dealt with.
Thankfully, inflation isn’t the end of the world and there are ways to lessen the negative effects that it has on your business. Understanding a couple of survival tips can make a little easier to stay afloat during these times of high inflation as a business owner.
Here are some tips for you as a business owner to dodge the effects of inflation.
Utilize Technology To Make Calculations
As a business owner you obviously have your business’s best interests at heart. Though this is likely the case, sometimes old habits die hard, and it can be difficult to embrace new ways of doing things. When it comes to utilizing technology, not embracing this practice could actually be unnecessarily costing you and your business a great deal of money.
Today, various forms of technology have the ability to help you do a number of things. In particular, various data collection and accounting software can help you glean insights about your business that may be impossible without them.
For example, you may not realize that a certain product is losing you money because of the space it takes up in your storage. By taking advantage of certain software, you can uncover insights such as these, which can help your business be more profitable and less vulnerable to the negative effects of inflation.
Do Some Financial Planning
For many small business owners, financial planning can seem like an unnecessary practice when one is struggling just to stay afloat. However, this is not the case, and the truth is that not having a financial plan may be a factor that is contributing to your struggles.
During times when inflation is high, it’s especially important to be extremely detailed with your financial planning while also being clear about your business’s financial goals and what it will take to reach them.
While developing a variety of finance skills is important, business owners can benefit tremendously from a thorough understanding of financial planning. With a financial plan in place, it’s easier to have a clear understanding of what it will take to keep your business afloat. This way — even though it may be difficult — reaching the financial goals you have, there won’t be a path riddled with uncertainty.
By having a clear idea of your financial goals, you’ll be more motivated to be responsible with your business’s finances and, as a result, be more equipped to deal with inflation.
Automate Whatever You Can
Automation is a practice that has the potential to make your life as a business owner a lot easier. Though it can be hard to give in to radical change, automating processes could potentially save your business a tremendous amount of money in various ways. Depending on what business you’re in, the process of automating your business will look different.
Sometimes, there is even technology that can do a job that you’re currently paying an employee to do. While it can be difficult to let employees go, cutting down on costs can sometimes be the difference between having to shut down and not having to. During times of inflation, you as a business owner are going to have to save every penny that you can.
As such, investing in some automation for your business could save you a tremendous amount of money in the long run.
Cut Costs Preemptively
Even if you haven’t yet started to feel the devastating effects of high inflation as a business owner, it can be a lifesaver to start cutting costs preemptively. Though this will look different for each business, any costs that aren’t essential may have to be cut.
It might be stopping Friday lunch in which you treat everyone to pizza, or it might be going to the dollar store to get supplies instead of enjoying the convenience of Amazon.
As a businessowner, only you can determine what’s essential to your business. It can be useful to sit down with a pen and paper and brainstorm possible places to cut costs. Play out each scenario, and if business is fine without something it may be a good idea to cut it.
It Might Be Time To Raise Prices
While raising prices isn’t always ideal, sometimes it’s the only option. If you find that inflation is hitting you hard then it’s time to start increasing prices. Even if high inflation hasn’t started sending you into a panic yet, it can be smart to start raising prices slowly. Raising prices in small increments over a long period of time can be less jarring to customers and can lessen the negative impacts of increasing costs.
Depending on your business, you might want to only raise the prices of a few items. Whatever it is, when the time comes, sometimes as a businessowner you have no choice but to bite the bullet and raise prices.
Diversify Where You Can
While pretty much all businesses need a certain amount of cash on hand to run smoothly, when you have excess cash, it can be useful to invest it in various places. Whether it’s in real estate, gold, or index funds, investing your money in various place has the potential to protect you against inflation.
While this may not be a viable option for all businesses and businessowners, for those who can, it can be a great way to protect yourself.
So, if you find that your business has more cash on hand than it necessarily needs, think about investing somewhere else in order to hedge against inflation and make sure that your assets retain as much value as they can.
Take Advantage Of Government Assistance
If you’re struggling as a business owner, then you should jump at any opportunity you can to take public assistance in the form of business grants or loans. Though it can be difficult to swallow our pride sometimes, the truth is that times of high inflation may sometimes warrant us having to do things that aren’t ideal.
Explore local resources and government websites to see if there are any business grants or loans that you meet the requirements for. You might even be able to save your business when it’s in dire straits by doing so.
You Can Weather The Storm
Though being a businessowner during times of high inflation can feel like a constant uphill battle, it’s more than possible to weather the storm and make it to the other side. Other people have done it, which means that you’re capable of doing it as well.
While it might not always be easy, taking the proper steps to ensure that your business will survive high inflation can make a huge impact on the success of your business. Don’t let high inflation take your business away from you. Fight back and do everything you can to make sure that your business comes out on top.
