As a business owner, inflation can feel like an absolute nightmare. While running a small business can be challenging enough, inflation adds another layer of difficulty that can sometimes feel impossible to overcome.
Luckily, there are steps that you can take as a business owner to mitigate the effect of inflation on your small business. By taking the right precautions, you can make it through times of high inflation and grow your small business into the great success that it deserves to be.
Downsize If Possible
Though it’s definitely not ideal to downsize, desperate times can call for desperate measures. And for a small business owner, calling times of high inflation a desperate time could be an understatement.
Downsizing is a straightforward way to save your business money during a time that it definitely needs to. Though it may sting a little, downsizing can actually be a great way to get your small business’s expenses down to be more manageable in times of high inflation.
Downsizing can take a few different forms, and only you as the business owner can decide which form is right for you and your business. As was seen during the COVID-19 pandemic, many businesses are actually capable of working remotely without really affecting business processes.
If this is the case for you, then it may be a good time to let go of your office. This way, you’ll be able to retain your employees while still cutting costs substantially. This will allow you to better weather the storm of high inflation while ensuring that your business will survive.
Increase Your Marketing Efforts
While hiring a marketing firm to do your marketing can be pretty costly, doing your own research and implementing new marketing strategies yourself can be cost-effective. In times of high inflation, it’s important that you still have a steady stream of customers purchasing your products or services. That means it’s your job to do whatever it takes to keep customers coming back to you. Marketing is a great way to both bring customers back, attract new customers, and safeguard your business from the negative effects of inflation.
For those who haven’t been doing any marketing — save for the sign on the store — a little bit of marketing effort can go a long way. Whether it’s writing blog articles on your business website which utilize keywords or crafting an email list to send prospective customers promotions, these low-cost marketing efforts could end up bringing you high return results.
Take Public Assistance When You Need To
While taking public assistance isn’t always your first choice, when that’s the only barrier between you being a business owner and you being unemployed, it’s a good idea to take it. If you look into your local government agency office’s resources, you might just find that there is a special kind of help for struggling small business owners.
Just like students need loans and grants to get through their education, your business might need loans and grants to get through times of high inflation. Though you may have to swallow your pride, it’s important to take whatever government loans or grants are available to you in order to make it through the high inflation and ensure your business’s survival.
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Raise Prices
Though it can be hard for you as a business owner to take the leap and raise prices, in times of high inflation it might be the only option you have. It can be difficult to make products and services more expensive because it seems like it might alienate customers.
While this isn’t ideal, it’s one of the best ways to ensure that your business will be profitable enough to make it through times of high inflation.
Depending on what business you’re in, the rate at which you raise prices will vary. You have to be mindful of your competitors and what their prices are when you’re making adjustments. In addition, it can help to raise prices incrementally over time. This can be especially useful to do once there are signs that times of high inflation are coming. This way, the increased prices won’t come as much of a shock to your customers.
Invest Elsewhere to Hedge Your Bets
While not every small business owner is in a position to do so, those who are able to, should invest funds elsewhere to hedge against inflation. This is a means of ensuring that the worth of your current money is kept, rather than letting it dip with inflation. Typical investments used to hedge against inflation include gold and real estate.
While gold may be odd for a small business owner to invest funds in, real estate might be a great choice. The difficulty lies in knowing for sure that high inflation is nigh. If high inflation has already struck, it may not be a great time to invest in real estate as it’s likely that real estate prices are inflated.
Don’t Let Inflation Ruin Your Small Business
High inflation can be a force to be reckoned with for any small business owner. However, some steps can be taken to minimize its effects. By being aware of these steps and implementing them to the best of your abilities, you can dodge the negative effects of inflation and ensure that your business lives to see another day.