Rapidly rising inflation is affecting every business owner in some shape or form, with 74% of business owners dealing with supply cost increases and 45% of entrepreneurs finding ways of managing the cost of rising wages. This is all taking place within a tricky climate where staff are resigning rapidly, consumers are shifting from goods to consumer spending, and all this is amidst the backdrop of a looming recession. It’s not pretty out there. So perhaps it's time to rethink business as we know it and consider strategic ways to help you survive these rising costs.
1. Reduce unnecessary expenses
Take a good hard look at your company spend and reconsider if you actually need everything you are spending on a monthly basis. If this feels true for you, think carefully about what you actually need and what can be cut. Figure out if you can make any significant reductions in your operations, subscriptions, utilities, or marketing spend. Also, think carefully about your suppliers and whether there are better deals to be made, either with someone new or by renegotiating existing terms with current suppliers.
2. Think about employee benefits
During periods of high inflation, it may not be possible to afford raises across the company. So how do you retain talent and ensure your staff still feel valued in significant ways? Here you need to get creative with attractive alternatives like more paid time off, opportunities to work from home, flexible work schedules, health and retirement benefits, profit-share, staff discounts and growth opportunities. This kind of thinking creates a healthy environment for employees to grow themselves in and can really help you navigate the pitfalls of rising costs elsewhere in the business.
3. Get creative about driving sales
If sales have hit a downturn, consider creative ways to get back in the game. This might take the form of re-thinking your marketing plan, creating promotions and discounts, tweaking pricing, launching new products or services, repackaging old ones, as well as upselling to existing customers.
4. Strategically analyse your business
Keep in mind that you cannot re-think something you don’t understand. So it is crucial that you meticulously analyse your business in order to have a clear view of why things are the way they are. That way you can then pinpoint any bad practices and come up with clever ways to sort out these issues. When analysing your operation there are some key questions you need to ask yourself:
- What manual tasks can be automated?
- What is my marketing ROI?
- What expenses can be cut?
- Is my customer satisfied with my product or service and how can I improve my offering?
These questions will help you hone in on problem areas so you can really open up the scenario and identify where improvements can be made.
The bottom line
During difficult times of rising costs, it is necessary as a business owner to slow down and recalibrate. While this process may feel incredibly time-consuming and stressful, it is very necessary. Try not to think about it as disheartening, but rather as an opportunity to learn and develop. Because on the other side of this hard conversation with your business, you will be better equipped to stand the test of time and see yourself through this (and any future) difficult period of rising costs.
