Ways to Protect Your Small Business During Inflation

Though the inflation rate inched down in September, but for other regions outside National Capital Region (NCR), still it accelerated. Signs of inflation are everywhere, especially to us, small business owners. Food costs and energy items increase due to rising of oil prices, which made other product’s prices increase as well.

If inflation rate gradually increase again or slows down rapidly, it could boosts up your small business’ costs and squeeze its margin. We don’t want that to happen of course. Now is the time to begin to address the threat of gradual change in inflation rate and to develop strategies to protect your business’s bottom line. Here are some ways small businesses can combat the danger of inflation.

Spend wisely. Ask yourself, do I really need these things I’m spending my money on? Think how much and how often you will need something before buying it. Buy only what you need, more importantly spend and invest on durable goods, in other words, these are items that does not quickly wear out, or more specifically one that yields out multi-tasks.

In addition, reduce your consumption or manage wisely recurring monthly bills – phone bills, cable TV, internet, etc. or if possible eliminate some of them, especially those that you seldom use or don’t necessarily help your business.

Learn to recycle your items. Recycled items could be as effective as brand new items depending on how you use and produce them. Some of which are office supplies – bond papers, folders, envelops, clips and many more, furniture, equipment, etc.

Look at your home’s storeroom, you might find items that have been only stored that could still be useful in your business. Cutting costs on items that could be recycled will be a great save for your business, remember inflation could be dangerous when you don’t manage your money well.

Watch out for price increase. During inflation, prices goes high following your raw materials and it would be difficult for you to gain unless you match it with price increase to your products as well. However, raising prices could be a great risk that could make you less competitive and raises the possibility that potential customers might find somebody that could give them the lowest cost they could possibly get. Remember during inflation unemployment is high and prices raises simultaneously, therefore people most likely find the best way to stretch out their budget.

You might inch up your price but make sure to offer good deals that better encourage your potential customers – discounts, freebies, packages, etc. to match your price increase. Or, it’s up to you on how you strategize on marketing to attract and maintain potential customers to support you during inflation.

Moreover, this is the time consumers slow down buying due to price hikes in most commodities and you might be thinking on spending on advertisements to attract more customers. I tell you, this isn’t a good idea. Price alone may speak for your sales. Meaning, proper strategy in pricing and marketing may generate your sales without spending much on advertisements. Since prices goes up during this time, you might as well increase your prices but as I told you, match it with discounts, freebies, packages and whatever may help you generate sales despite of the price increase.

Evaluate properly your investments. Make sure to invest for long-term capital gains, because short term investments tend to give deceptive results or sense of making profits while in reality you’re not making profits. Don’t be encouraged with some of their fancy offers or because a trusted friend tells you to do so, evaluate properly how the company manages their investments as well. Remember, losing can occur anytime during inflation times.

Even economic change may seem to give negative effects in our businesses there are several ways to fight its effects. All we need to do is proper evaluation, focus and knowing how to predict economic change is a very important financial tool.

How about you? How did you manage to maintain your business during inflation? Share us your thoughts at the comments section below.


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