Tips For Dealing With Inflation As A Small Business
Inflation can really cause major struggles, especially for smaller businesses. With the rise of inflation, the shipping increases, and supply chain struggles, we know it can seem daunting.
Not to fear! These 5 awesome tips (in absolutely no particular order) can help you come out on top!
keep up with the economy
Your costs are rising in all areas of your business, and unfortunately, you must raise your prices to reflect the direct impact you are experiencing.
Customers today have likely accepted the rise, as they are experiencing it in every area of their life (i.e. groceries, gas, retail), and understand it is just part of life right now!
The way to raise prices, with the least risk of upsetting the customer, is to be transparent and let them know ahead of time what is comin’ their way!
Doin’ it the right way will allow the customer to plan accordingly which will build trust between you and your customers.
adjust your product sizes
Another strategy is to keep prices the same but curtail the amount of the product in the container, or the size of the product, aka lil’ shrinkflation. And while this may not be ideal for all customers, it seems to be less noticeable and cause less unhappiness than price increases.
However, it is important to, again, be clear about it. Remember, transparency is key. This is something you would need to communicate with your customers, as well.
Do not feel the need to apologize, as these circumstances are out of your control. Small business owners can’t afford to absorb the burden of the rising costs you are experiencing as a business owner.
The current annual Inflation rate is currently up 8.3%, and is expected to rise (ugh). This is the highest level in the last 40 years! And shipping rates are up 23%! But we are all in this together! Keep on doin’ what you do best!
buy in bulk
Lock in your current costs as long as possible aka buy in bulk! With the rising cost of gas, shipping, and inflation, the outlook is not all confetti and cupcakes. We get that. That is why stocking up on supplies now is your best bet. When you can find sale items for your business, stock up fast and stay ahead of the game!
cut unnecessary expenses
Cut expenses that are not entirely necessary. I promise ya, there are some expenses that have been sneakin’ through and some that are just not essential.
Seriously, now is the time to utilize all the free services available!
There’s also a lot that you can do yourself (i.e marketing and social media, shipping, and customer service). Passively post your website in your name and signature so it promotes your business. This works well in community groups!
Also, look at all your line items to see what services and subscriptions you are utilizing that could be scaled back or stopped. The small changes really add up to big cutbacks!
And don’t forget to keep a spreadsheet up to date on each component and the shipping price, so you can properly analyze your cost for the item, before determining the new price.
prepare for new customers
Be ready and prepared for new customers! Inflation organically creates new customers interested in changing vendors or trying new things. You can capture new business during this time.
Use this time to be very active in your customer community and network! Be real, raw and relatable with your new and existing customers.
Don’t be afraid to advertise, put yourself out there and get after it!