Friday, July 19, 2024

How to Combat the Negative Effects of Inflation in Your Business

Thank you to Guest Writer, Sharon Wagner.

 Sharon Wagner uses her site Senior Friendly to offer advice geared specifically toward seniors to help them make healthier choices and enjoy their golden years.

If you’re in business, you’ll know that inflation can occur for various reasons. When the general cost of living increases, this affects a consumer’s buying power and businesses in general as business owners seek ways to reduce their expenses on the whole. Speaking of which, here are some things you can do – courtesy of Professional Global Etiquette – to combat inflation when this inevitably occurs.

Increase Your Prices Accordingly

Generally speaking, when there is a price hike, you have to increase the prices of your goods and services too. But by how much you do this is up to you, although it is a good idea to keep an eye on your competitors to give you a rough benchmark of what you should be aiming for cost-wise. 

Reduce Your Wage Costs

Here, you may want to reduce your wage costs so that you can absorb the price increases without them having too much of an effect on your bottom line. This can be a rather sensitive issue, especially when it means letting go of staff or reducing their hours. However, you can still reduce your wage bill effectively by restructuring how your employees work without it being too much of a demotivating factor. This can be done by introducing flexible hours and wage incentives if targets are reached so that they don’t feel ousted from their jobs when you can rather motivate them to work better and harder to achieve more rewards in the end. 

Cut Out Costs Where Necessary

As much as inflation can be seen as a negative occurrence, it can also be seen as something positive as it forces you to reassess those areas that are no longer productive. Once you have identified what these are, you can then eliminate these from your portfolio so that you can then reallocate these expenses to areas within your business that could do with additional funding to make your business that much more productive. 

Keep an Eye on Fluctuating Interest Rates

Most businesses will need to borrow money from time to time. But it is better to borrow when interest rates are low. This will require you to keep an eye out for possible interest rate increases so that you can plan for these better. Furthermore, when it comes to borrowing money, it may just be better to ask for a fixed interest loan to avoid fluctuating interest rates due to inflation. 

Utilize Affordable Software Tools

While there are many software tools that require you to pay a monthly premium, there are plenty of affordable, even free tools that you can use to help run your finances better, such as accounting software, for example. Take Wave, for example, which allows you to process invoices and track income and expenditure as well as assist you with basic accounting functions without having to be bound to a monthly premium. 

Another example is looking at ways you can cut down on your marketing expenses by investigating marketing techniques that are not so expensive. Moreover, you could opt for more traditional techniques as opposed to digital marketing tools, which can be more expensive. 

For example, flyers work out pretty well if you want to increase the visibility of your business without having to outlay too much capital in the beginning. What’s more, you can even save costs by doing this yourself with a free online flyer maker. Just choose from the many available templates online, and then you can adjust it according to how you want the text, font, and colors to look to depict your band accurately. 

Certainly, taking into account the effects of inflation will take some attention to detail if you don’t want to feel the effects as much and you want your business to carry on as per normal. 

Professional Global Etiquette believes everyone should go through either a personal or business etiquette course, and we encourage you to reach out to us to learn more about our customized programs for both businesses, employees, and individuals. Call 386-631-4577.

Image via Pexels

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