Small businesses in times of inflation
Small businesses in times of inflation. The rise in prices of raw materials due to inflation worries many small businesses and places them in the difficult dilemma of passing these increases on to the products or services they offer to their customers or not. A decision that carries different consequences.
But, Inflation affects business in different ways, it depends on the type of industry where it is developed and its characteristics.
If the business product is very exclusive and has little competition, making a decision is much easier than those businesses that fight, side by side, for a space in the market. The former will have fewer problems raising prices, and customers will have no choice but to buy the product or stop buying it in general. However, those who have competition must know how to read the market in all their decisions. Raising prices a lot would be tantamount to scaring customers away towards rival businesses.
To survive inflation, not everything depends on competition, or on raising prices. There are other internal measures that can be taken that will allow it to be more efficient, develop and even emerge stronger from inflation.
- Analyze spending
Find out where you spend every penny and save on what is not truly essential for the business. Ask why you buy each raw material or material and question the quantity. If there is no response, please stop purchasing it.
- The basics are productivity
In times of crisis, it is important to have dynamic and analytical thinking. It is essential to focus on how to stimulate productivity, without increasing or even decreasing costs. For example, working from home for many companies can be a solution. Save on office expenses, resources such as gasoline, and time, and keep your staff happy. Better organizing work schedules can help increase productivity and reduce expenses. Try to eliminate unnecessary or duplicate work and automate as much as possible.
Retaining experienced employees in this period can mean a competitive advantage. Spending time and resources training new workers to get rid of experienced ones does not seem like a very efficient measure. Furthermore, placing expensive material or the hope of your business in inexperienced hands is not always a good way to be efficient.
- The clients
Customers make business. Gaining their loyalty should be one of the main objectives. It is essential to create programs to reward loyalty. For example, give them ease of payment, discounts or other incentives.
- Update insurance policy
In inflation, more than ever, a good idea is to review the terms and conditions of your policy, keeping in mind that the new prices may affect the estimated replacement costs in the contract. Small businesses in times of inflation.