The Squeeze of Inflation
We are all feeling the squeeze of inflation right now. Gas prices, grocery prices, basic living expenses that we all use and need are costing more than ever. Whether you are single and live alone or a family of four or more, everyone is finding ways to cut monthly expenses. Unfortunately, a lot of those cutbacks are hurting our small businesses. Restaurants especially are struggling right now. Most Americans admit to eating out less when they’re finding ways to lower expenses. If your small business is feeling the effects of inflation and looking for long term ways to protect your business, we have some ways to help.
Most business owners know easy everyday ways to cut expenses and most small business owners have had to lay off people at one time or another to save some money. That’s the hard part of owning your own business. As small business owners, we all have tough decisions to make regarding our businesses.
Here are a few ways you can protect your business and save some money during inflationary periods.
We have to start here. Are you overstaffed? Cutting employees is never easy but it has to be considered. If you’ve been on the employee roller coaster of trying to keep valuable employees or hire employees that are valuable. Look at your hiring practices to cut costs around training and onboarding. If you’re forever training new people because the last person didn’t stick, you’re wasting your time. So, what are you offering to potential candidates to bring in stronger employees? Consider offering more than just raises or income to attract talent. Offering career movement, additional training and support are a great way to hire strong employees that don’t cost a lot up front but will stick with your business because they feel growth within your company. Onboarding and strong training with development potential makes employees feel empowered and a part of your business.
Another tough conversation for many small business owners right now. Debt may be the very thing that is drowning you. If that’s the case, it can seem overwhelming to get ahead of it. Working with a financial advisor or even a CPA to find ways to have your cash work for you can help. You should also be using the Small Business Administration debt forgiveness program
PPP loan forgiveness (sba.gov). Reach out to your bank about interest rates and renegotiating your lines of credit.
This may seem like something you’ve got under control. We all like to think that we use our time efficiently but where you may be missing is the tasks that you complete without thinking about them…such as accounting, marketing or invoicing. Take one week to jot down your tasks as you’re doing them. Within each task, try to keep a log of how long that task took and the steps you took to complete it. This exercise may surprise you at the amount of time you’re spending. If you can save yourself or an employee, by charting their tasks, even 4 hours a week, you’ve made a big improvement.
Subscriptions, Services & Cash Flow
This is one of those tips you can use at home and at work. We all have monthly subscriptions that we have completely forgotten about or service contracts that we’re paying for that aren’t worth the money anymore. Call your service providers to discuss costs. Oftentimes, they’re willing to work a better price point out for you. Take a close look at your cash flow and where you are spending your money. Follow up on unpaid invoices to avoid late fees.
Raising prices to stay profitable is a very hard decision. Raising prices may make you more profitable but it could also price you out of your market. How aware are you about your competition? Websites and social media give us a great gift to be able to readily stalk our competitors without walking in their doors. You can find out a lot about your competitors through their online presence and…if they haven’t capitalized on this yet, you have a wide open market to beat them to it! Know where your competitors are so you can price aggressively with your market.
If you have escaped the supply chain issues at this point in the pandemic, you have been extremely lucky or you are already on top of your supply chain distribution. Look at your suppliers and be cautious of single supply chain distributors or suppliers that have a long lead or delivery time. Pay close attention to your shelf life of products and the percentage of products that have to be managed or stored that cost money to you. Once you have an idea of your areas of risk, you can counter them by having backup supply chains, domestic suppliers instead of overseas suppliers, reducing storage costs for inventory items.
Automating Repetitive Tasks
If you’re an old school business owner, this may seem uncomfortable, but it could be a huge cost saver and save your company huge amounts of paid employee time. If you’ve visited a fast food restaurant or even your grocery store, you’ve noticed some automation that has removed the need for as many front of house employees. You don’t have to put in expensive systems and registers to automate your small business. Just take a look at your everyday tasks.
How Are You Protecting Your Business?
What steps are you taking right now to cut costs and save time at your business? This list may seem overwhelming and like a lot of work upfront. Take one task this month and really examine how it could help protect your business. You just might be surprised to find an easier way to manage your workload while cutting costs. As a small business, we are always working hard to ensure we’re running our business the most efficient way. These are just a few of the small business practices that take place every single day for most businesses. So, where are you going to start?