Inflation is the gradual and sustained increase in the prices of goods and services in an economy over a period of time. No matter what business you are in, at some point you will have to face cost inflation. Its main cause is an increase in the supply of money or credit, which causes prices to rise. So a marketer should be prepared to beat inflation.
Here we’ve assembled seven tips on how to deal with inflation in a business. These tips will help you maintain your profits and keep your business running smoothly during an inflationary period.
1. Diversify Your Supply
Rising inflation offers a reason to diversify your chain of raw materials, products, etc. It may be dangerous to be too dependent on any single source during economic uncertainty. If you experience increased costs, your cash flow situation could become dangerous to operations. Diversify your suppliers and turn to backup options to protect your business from inflation.
2. Try Bartering
Ask your vendors to provide you with a discount on the supplies you buy if you can provide a product or service that they need. This is recommended especially for small businesses and locally-owned vendors. This way, you can decrease your cost of goods sold.
3. Focus on New Customers
During inflation, lots of new customers, that were previously unreachable, may turn to you. So it’s important to capitalize on that opportunity. Pay special attention to your new customers and try to make it a win-win transaction for all. You should experiment with new customers without limiting yourself to previous methods.
4. Reduce Expenses Where Possible
Small businesses should reduce their expenses as much as possible. A hybrid or remote office model allows the flexibility to move to a smaller and less expensive office. Hiring employees from online platforms will allow you to save your expenses. Find alternatives that can also save you money.
5. Give Customers What They Want
Customers come back due to great products and personal service. So, in a downturn, focus on providing what customers want. You should automate order updates so they hear from you more often. Work with customers by offering discounts like a loyalty program, reseller pricing, or something like our max saver that discounts products, so they stay with you after.
6. Stock Necessary Supplies
During inflation, small businesses should consider stocking up on basic supplies and core materials. This way you can save money that can be used for other aspects of the business. Aside from that, this will help to keep the company from becoming caught in future supply chain disruptions.
7. Implement Many Revenue Streams
If your business niche is virtual assistance you should think of other functions that align with it—like email marketing, website optimization, and other niches that route with virtual assistance. Having numerous revenue sources will help small business owners combat inflation.
To summarize, a smart marketer should handle all the touchpoints effectively and adopt all the ways to beat inflation smartly. Maybe you are the master of your own business but inflation is not in your control. So use these 7 tips to beat cost inflation in your business.