By Camille Johnson
The minute you hear the word “inflation,” you might envision exorbitant grocery expenses or declining investment values. But if you’re a small business owner, you might also have to deal with lost profits, decreased productivity, and a host of other problems. The economy will always fluctuate, though, and it’s important for small business owners to be prepared for every possibility — including inflation. Consider these six ways from Port Jervis Newsroom that will help you to fight back against inflation.
1. Lay Off Staff
According to FundSquire, as much as 70% of a business’s expenses can be attributed to payroll costs. It’s unsurprising, then, that you might consider letting go of some employees when inflation hits particularly hard. It’s true that this might temporarily decrease your operating expenses, but you should also consider whether this is conducive to your business’s long-term strategy.
2. Reduce Operating Costs
In many cases, lying off staff isn’t the most effective way to reduce operating costs. You might find that reducing costs by automating simple tasks is a much more effective strategy. Transitioning your payroll operations to an accounting software, for example, can massively reduce the overall expense of operating your business. Don’t subscribe to a costly accounting program when there are free versions that offer tools such as invoicing and tax deduction management.
3. Increase Productivity
With the impact of inflation affecting your community, you might see that your staff are less enthusiastic and thus less productive. When productivity slows down, though, this can further harm your business’s ability to maintain its profitability. It’s vital that you encourage staff to remain engaged and boost their productivity. You can do this by incentivizing achievements and rewarding your most productive employees. Allowing your employees to work from home may also reduce costs and boost productivity.
4. Raise Prices for Customers
When inflation shows no signs of slowing down, Walz Group explains you might consider increasing the price of your services for your customers. This is often viewed as a last resort, but sometimes it’s the best option available. Customers are already confronted with rising costs in other areas of their lives, so they are likely to be understanding about the change. If anybody questions the increase, you can explain that your operating costs have risen due to inflation.
5. Optimize Your Website
An increasing number of people rely on website purchases for daily purchases, so find ways to capitalize on this trend. If you don’t have a website, now is the time to invest in one. If you do have a site, then take the time to optimize it so that it presents visitors with customized views based on their browsing history. This site could be helpful to understand the value of a tailor-made webpage and how to use web personalization software to make it happen.
6. Stockpile Essential Supplies
Many businesses also face a sudden increase in prices of supplies that they need to operate their business. It’s hard to predict when inflation will hit and cause prices to increase, but you can always mitigate the impact of this problem by stocking up on supplies before the price goes up.
7. Maintain a Positive Mindset
Perhaps the most important antidote to inflation is the maintenance of a positive mindset. Every successful entrepreneur knows that risk is part of the equation when you start a business — and one of the biggest risks you can face is that of inflation. Rather than becoming discouraged by declining sales, take the opportunity to develop a plan for strengthening your business.
Don’t Let Inflating Expenses Sink Your Business
Your business might seem like it’s slowly sinking when inflation threatens its profitability. If you have an effective strategy, though, you don’t have to succumb to the stress. Instead, you can plan for the challenges that emerge and ensure that you have the resources you need to bounce back. Look for ways to automate simple tasks to cut costs, and implement personalization software that will optimize your website for your customers’ preference. With a few strategic moves, your business will be in a good position to weather the inflation storm.
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