Inflation has hit both consumers and businesses hard, and it is critical for businesses to adapt, especially as customers rethink how they choose to spend their money. Here are eight ways your small business can weather the record inflation our economy is undergoing.

1. Find Expenses You Can Reduce

Look for ways to reduce expenses throughout your company. Consider less expensive office space, switch to free software solutions, negotiate with suppliers, buy used equipment, etc. If there is any area in which you can save money without significantly impacting your operations, now is the time to evaluate.

2. Consider Price Adjustments

Take a look at what you're charging for your products/services and determine if a price adjustment is in order. Perhaps raising prices on only some items could make an impact. Just be careful not to raise them in a way that will alienate your customers.

"Be up-front with customers about price increases," suggests the AP's Joyce M. Rosenberg.1 "Don't let regular customers find out they're paying more when they go online to order or when the invoice arrives. Being transparent — letting them know why prices are going up — will help them accept the higher costs and stay loyal to you."

3. Boost Efficiency

Boosting efficiency within your company can help you get more out of your operations without having to spend more. It may mean eliminating work that doesn't directly help your bottom line.

"As inflation looms, companies across industries are reexamining their work and determining what adds the most value and is absolutely necessary, providing both cost savings and the opportunity to deploy dollars and scarce labor resources to what will help them grow," explains Harvard Business Review.2 "Eliminating work can take many forms. Snack maker Mondelez International is well on its way to streamlining manufacturing by eliminating one in every four products in its portfolio, a goal it set in the opening months of the Covid-19 pandemic. Hotels everywhere are limiting housekeeping by making it an opt-in vs. opt-out service."

4. Increase Repeat Business

It's easier to get return customers than it is to get someone for the first time, provided that you offer an experience worth returning for. Focus on ways to encourage repeat business and build customer loyalty so you can count on continued sales from those who are already familiar with your business. With enough repeat business, you may be able to reduce your marketing budget.

5. Find Ways to Increase Word of Mouth

Word of mouth is considered by many to be one of the most effective forms of marketing, and that's because it happens organically among people who trust one another or at least have an understanding about each other's tastes and preferences. If a potential customer hears about your business from a friend, there's a better chance they'll visit your store or website than if they learn about it from an ad. Provide great experiences and find ways to encourage customers to spread the word.

6. Work with Local Suppliers as Much as Possible

Make a concerted effort to work with local suppliers. This not only helps your local economy, but it reduces the distance items must travel to get to you, which can help you avoid some of the supply chain issues that have been plaguing businesses of late. It's also a great way to form long-lasting relationships with businesspeople in your own community, which may lead to other benefits.

7. Adjust Business Hours

It may be helpful to adjust your business hours. If you get significantly less business past a certain time or during certain days, it might not be worth the cost to stay open the extra hours. Be sure to communicate any changes with your customer base.

8. Explore Finance Options

If you've been hit particularly hard by inflation, consider seeking financial help. Research a  business loan or line of credit to help you get through a challenging time.

Few businesses are immune to the record inflation we're seeing in the country, but it is a challenge you can face with the right strategies. Focus on saving money, increasing overall efficiency throughout your operations and marketing efforts, and seek help if needed.




The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC