Data tokens on this page
Four Ways Your Business Can Be Creative with Inflation Strategies
Four Ways Your Business Can Be Creative with Inflation Strategies
For small businesses, the hits keep coming. As of 2022, inflation has reached a 40-year high, and 32% of small business owners consider it the “single most important problem in operating their business,” according to an April 2022 report by the National Federation of Independent Business. Couple that with the struggles to fill open jobs and ongoing supply chain disruptions, and the obstacles can feel insurmountable for solopreneurs and independent business owners.
To weather this period, making small tweaks here and there could make a big difference for organizations, says Athena Simpson, who specializes in business and strategy coaching for women. “There are two ways to make more money,” she says. “One is reducing costs, one is actually getting more revenue. If we're looking at a time where we're probably going to get less sales, we need to be reducing our costs.”
Simpson shared the following cost-cutting tips for independent business owners to consider, during these turbulent financial times.
Audit your expenses
If there’s ever a time to do a deep-dive into your costs, it’s now. Are you paying for software you don’t use? Subscribing to services or publications you don’t need? When was the last time you compared prices among suppliers? Scrutinize each and every one of your expenses, and you may find areas to cut costs that you never even considered. “If you end up saving a couple hundred dollars a month that way, or even a couple thousand, that adds up to a lot over time,” says Simpson.
Invest in areas that pay off
As a small business owner, it’s tempting to want to do everything all at once: building and maintaining a whiz-bang website; designing the perfect logo, branding, and marketing materials; creating top-notch videos; hiring a public relations firm; and the list goes on. Again, it’s time to do some soul searching on where you’re spending money and where you’re seeing a return on your investments. “A lot of people get caught up in vanity metrics, like how many subscribers I have, how many ‘likes’ I have,” says Simpson. “But what does that actually do for your business?” She tells clients to go back to the basics and test which activities are making money and which aren’t, and to make cuts accordingly. “It's a process of becoming an analyst in your own business and removing your emotion from it, which is really hard,” she says.
Outsource what you can
Being a business owner doesn’t require you to be the be-all-end-all of all of things. In fact, bringing in outside assistance to manage certain tasks means the regained time could allow you to focus on the areas that matter most. These days, help does not have to come in the form of W2 employees. Simpson extols the virtues of outsourcing by hiring independent contractors, such as online business managers, who can help run day-to-day business processes and projects from afar, and virtual assistants, who can handle a wide range of duties, such as scheduling, planning, research, and administrative tasks. “If your time is worth $500 an hour, and you're doing something that somebody else can do for $10 an hour, then it's kind of a no-brainer,” says Simpson.
In addition to taking a financial toll, Simpson says that certain tasks take a toll on energy. When a business owner is able to outsource those, the enterprise benefits. “When you’re doing tasks that you absolutely love, that ends up giving you more energy which you can put in the business and be creative and drive it forward,” she says.
Go virtual
The pandemic has taught employers everywhere that they, and their staff, indeed can be productive while working remotely. If you have employees who are able to work virtually, and you haven’t yet made the leap, consider how much you could save if you’re not faced with a monthly lease or mortgage, not to mention utilities and other expenses. Plus, making the move to a remote office could help retain employees. “A lot of clients that come to me are wanting to leave their jobs because they had a big wake-up call, they're realizing that quality of life is really important to them, and they don’t want to go back to the office,” she says.
Right now, during these times of elevated inflation, cutting costs is a necessity. While the pinch is temporary, the habits you're forming will last. Consider this to be an opportunity to think creatively and position your business for success, long after the turbulence has cleared.
Looking for a better banking relationship? Wintrust is a resource small businesses can count on.