Small Business – Surviving Inflation
To Maintain – Cause or enable to continue.
Finding a sweet spot for your business is hard enough. Maintaining it is just as hard. Add an inflationary economy to that, and it feels impossible.
The U.S. Chamber of Commerce is hearing that message from small businesses across the country. And it’s not just from restaurant owners.
- A Minnesota Gym owner has been pressed to raise class prices by an additional 6% to cover a utility increase.
- An emergency Clean-up company was pushed to add a surcharge to cover higher fuel costs.
- And even our local Bowling Center has been forced to increase sandwich prices to cover the increases from his distributors.
Some of those prices can (and might) come down when the Feds get a handle on inflation. Some (like utilities) will never come back to pre-pandemic prices.
What’s a Small Business Owner To Do? Plan -
Organizations, like the U.S. Chamber of Commerce, can look to pressure legislators to cut tariffs, encourage domestic energy production, and work towards solving the worker shortage.
Those are long term solutions that require a plan. But not a solution in the short term to help small business owners
What To Do –
Small business owners need to watch interest sensitive spending categories.
- Carefully watch any open lines of credit and credit cards that they don’t exceed your ability to pay them off in one quarter of sales. Make sure you don’t use them for daily expenses.
- Know your industry. Watch your daily sales. Keep your Business Journal current with daily sales, # of sales, average sale, and product information.
- Carefully track what is selling and what is not.
- Adjust slowly and find other ways to have a community presence.
On a national level, July spending on cars and parts fell 1.6% and gasoline sales fell 1.8%. Sales at Health and Personal Care stores went up 0.4% and non-store retail sales rose 2.7%. Clothing and accessory stores fell 0.6% and general merchandise stores fell 0.7%.
If you are using your Business Journal daily, you should be able to spot any rise or fall week by week and adjust your offerings accordingly. Luxury is currently showing the largest slide. High end restaurants are reducing their hours to reduce labor costs, and temporarily removing their least ordered meals to reduce their inventory costs.
If you haven’t seen or heard from a customer in a while, send them and email with tips and/or ideas they can use. You might update them on your new hours or things temporarily not available. Reach out to them, not to sell but to connect.
What Not To Do –
- Don’t eliminate all your advertising. You should continue to keep your business name in front of your customers but find a way to reduce your costs.
- Cut your ad costs to reflect a cut in hours and/or offerings by the same percentage as the products or services cut.
- Be sure your social media effort and information are current. Consider offering a downloadable coupon to present at the time of sale. Make it a thank you for being a loyal customer.
- If you have emails for your customers, make sure your campaigns are based on quality not quantity. You don’t want to alienate them with a barrage of emails.
- Don’t ask for a sale, just inform, and connect. They will remember.
- Don’t let your staff go without having an honest and open conversation with them about their return. If you want them to return find out if there is some plan you can help them implement.
The only way to save money is by spending less. Whether it’s in your business or your life, controlling your spending is the key. And the best method to controlling spending is tracking it using a journal. Check out Jana’s Journals for some options.
- Have a plan
- Know What To Do
- Know What Not To Do
- Always use a business journal.