Among the many challenges faced by small businesses in a world, inflation is still carrying a heavy stick. The Christian Science Monitor wants to help, offering up a handful of tips for swinging your own bat back at inflation.
Let’s skip the preamble and hit those steps, shall we?
- Small, frequent price increases. People will gripe about small, visible increases. That’s the nature of consumers. But increasing your menu items by 10 cents occasionally at a restaurant, for example, beats having to catch up with rapid inflation by jumping your prices by a $1 per item. You’ll lose customers that way.
- Build cash reserves. Stockpile what money you can to fight off rising costs. As the Christian Science Monitor argues, “Cash is King, even during inflation,” so it makes sense to have as much on hand as possible. If you’re counting on an increase in sales to guide you through a period of increasing costs, you’re not likely to like the outcome. If that’s not an option, consider working capital*. Stockpile inventory ahead of price increases if you can do so without damaging your reserves, the CSM recommends.
- Stay aggressive with collections. We’ve had tips on how to accomplish this without alienating customers, which is worth keeping in mind. That money will be necessary to pay off your own debts and push back against inflation, and it does you very little good if you can’t get anyone to pay you back.
Any other tips to share with your fellow small business owners? Let us know!
Photo credit to heder at http://www.sxc.hu/browse.phtml?f=view&id=739839
*Working capital not available in the following states: AK, DE, ND, VT