In a report by the U.S. Chamber of Commerce and MetLife, it is found that 85% of small businesses owner are concerned about the inflation impact on their business. 1 out of 3 small business owners said that inflation Is their top business concern and Due to inflation pressure, 67% of small businesses have increased their rates.
Top 15 ways to survive inflation as a small business in 2023
3. Create a budget
4. Utilize technology
5. Negotiate with suppliers
6. Reduce operating costs
7. Freelancers
8. Product quality
9. Digital marketing vs offline marketing
10. Loan repayment
11. Outsourcing
12. Brainstorming with employees
13. Competitors analysis
14. Investing in employee
15. Stock in advance
1. Monitor Cash Flow
You should have to check that there is enough cash coming into your business to cover your monthly expenses or bills easily and when cash requires you can make business investments without any loan.
2. Increase in price
You can increase the price of products that have good customer reviews or perform well on your site. By doing this, you can use that extra cash ( generated by selling products ) for the fulfillment of inflationary costs.
3. Create a budget
Creating a budget is essential to meet business financial goals. For this, you have to track a record of your finances including revenue, expenses, debt, etc. Additionally, the budget should be regularly checked and updated to meet business goals.
4. Utilize technology
The use of technology can help a business to automate its processes which leads to a decrease in cost and an increase in business productivity.
For instance: there are two retail business owners. One sells its products in the offline store. Second have an offline as well as online store and listed its products on Amazon, Flipkart, and other e-commerce platforms. In this case, the second business owner will generate more sales without spending any extra costs on marketing and sales because he/she has more presence than the first business owner who only has a presence in the offline store.
5. Negotiate with suppliers
You can negotiate with suppliers to decrease the goods or services costs and delay the payment date. The benefit you get is that you have enough time to request customers to pay their unpaid invoices and when you get cash from customers you can pay that to the supplier.
6. Reduce operating costs
• Automate a process through software such as inventory software, and software as a service ( saas ) to reduce labor costs.
• Most vendors offer a discount when people pay their bills in advance. so you can pay your bills in advance to get the benefit of the discount.
For instance: you buy services or goods at $100,000 from a vendor in a year and he offers a 3% discount for early payment. Then here you save $3000 a year.
[ Note: the vendor you choose must have a good reputation in the market ]
Read also: 8 ways on How small businesses can reduce costs and increase revenue or profit in 2023
7. Freelancers
Freelancer is a self-employed person who does tasks on the base of a contract. You can use a freelancing platform such as Fiverr, PeoplePerHour, or Upwork to find a freelancer except for hiring an employee. Because hiring an employee will be a costly and time taking process compared to freelancers.
8. Product quality
Trust is the most important factor in any kind of business. During inflation, you have to maintain the quality of products to retain customers' trust in your business. if you don't do this the customers will slowly stop believing you and become your competitor customer.
9. Digital marketing vs offline marketing
• Digital marketing can reach more customers as compared to offline marketing.
• It is easy to measure campaign as compared to offline marketing
• You can target a specific audience in it
as compared to offline marketing
• It has a higher conversion rate as compared to offline marketing
• Return on investment ( ROI ) is more
as compared to offline marketing
Read also: Why is SEO Important for Small Businesses in 2023 | What are its Benefits
10. Loan repayment
You should have to pay the debt which contains high-interest rates first and after that second high-interest rates debt and the process carries on until you pay all of your debt. This will help you to save cash which you have to pay to the lender if you don't pay high-interest rates debt first.
11. Outsourcing
Quality employees play an important role in business growth. If you want to run your business in your absence then your employees must be talented. In inflation, you may have to manage multiple things simultaneously. Such as the cost of marketing and sales, investment, hiring, etc to avoid this issue you can hire remote talent on linked In or another similar platform.
12. Brainstorming with employees
You can do brainstorming with your employees on how to survive in inflation then there are chances that you will get a solution. The brainstorming with employees could include: how to sell more products or services to our existing customers or how to enter into new markets at fewer costs, what we can offer to people which our competitors are not offering due to inflation etc.
13. Competitors analysis
For the long-term survival and growth of a business. You have to analyze your competitors. In inflation, you have to do the same. Learn from your competitors who are performing well in inflation. Identify the difference between them and your business. What is the thing that your competitors are offering and you are not? When you got the solution ( what competitors offering ) add a few new things to that and create your own. So that your business looks different from others before implementing the solution ask some of your customers on are they willing to pay you if you offer them that solution ( the solution can be a product or service).
14. Investing in employee
During inflation, the cost gets increases and in that case, it will become difficult for small business owners to decrease their expenses. Here business owners can spend their cash on training the existing employees except for hiring and training a new employee. Because the process of hiring and training a new employee can be lengthy and costly as compared to training the existing employees. The training of employees is a one-time cost but a lifetime profitable process.
15. Stock in advance
When you think that inflation is going to hike after some days or weeks then fill your warehouse or shelves with stock that contains low holding costs before increasing its price. So if inflation occurs in the future you don't have to suffer from it.
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