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Are you a small Business owner and like many others caught in the current maze of high inflation?

Are you looking for answers and solutions to help get you thru! Yes, then read on.

In this environment, it’s vital to remember you are in Business to make money, earn a living and like most, want to remain profitable. You may be able to absorb some price increases and hope you can ride out the inflationary storm but ultimately if you are making less money, you are potentially putting your Business at risk of failure. I’m sure that’s not the path you want to go down.

Economic forecasts are mixed on what lies ahead but most predict high inflation isn’t going to disappear overnight or in the short term.

History tells us there is no magic fix

BUT there are ways to help you better manage and respond during these challenging times!

7 Strategies to consider implementing.

1. Lower Your Costs
2. Increase Prices
3. Boost your Cash position
4. Remodel your Services/Products
5. Implement Technology solutions
6. Market your Unique Selling Point
7. Contact Blackburn Accounting

1. Lower Your Costs:

• Review the Business areas to look for savings but avoid random, indiscriminate cuts. Examples are negotiating the best deals and prices on Insurance and office equipment and supplies.
• Lowering your costs will avoid having to pass on increases in full to your customers while still maintaining profit margins.
• Engage staff in cost savings conversations and activities. For example, offer incentives, for finding savings in their jobs, or departments. Let them be part of the solution, likely they will appreciate the opportunity to have input.
• Retain, keep and support well-performing staff. They are worth their weight in gold! This alleviates the cost of training new and attracting recruits.
• Explore outsourcing options and opportunities. This can be cost-effective in specialised areas such as Marketing.   Also, some Business functions and processes may offer lower-cost solutions by outsourcing.
• Seek out the best deals and prices. Get quotes from various Suppliers but make sure you compare all aspects to ensure you are getting value for money.  Cheaper isn’t always the best quality.

2. Increase Your Prices:

• Do your homework first. This requires accurately calculating what it is costing and how much extra it is costing you to supply products, goods or services. For example, for cafes, the cost to make a chicken burger and chips. Cost of ingredients, labour and overheads.
• Engage with your customers.  Have a conversation regarding the current high inflationary environment and seek their input, including on what they are prepared to pay.  
• Check out your competition. What are they charging for the same products? If there is a price difference avoid simply following their steps, do the sums and know your product and price point.
• Explain to your customers why you are increasing prices. This is not about justifying your position or seeking their approval.  But is about keeping them in the picture and personally informed.  Most likely with this approach they will understand and accept changes.  Importantly, advise and advertise in advance.
• Value-adding options are a means to consider when increasing prices.
• Gather information on your price increases. It’s critical to collect data, reviews and comments to guide you going forward. Based on this feedback consider whether or not you need to revise your pricing strategy.

3. Boost your Cash Position:

• Building a cash buffer can help you through tough times. Essential to have a debtors management strategy and collect any monies owed asap. Also, encourage cash sales rather than credit terms.
• Move slow or sleeper stock with discounting, particularly for cash transactions.  This can improve your cash-flow and provide the opportunity to stock new or better-selling products.

4. Remodel your Product/ Services:

• Do your research and calculations before taking the steps to remodel. This action needs careful consideration as you don’t want to damage your reputation, brand and quality goods.
• Better manage your price increases by adjusting or remodelling a product.  Reducing the size of the product while keeping the same price is one example.

5. Implement Technology Solutions:

• Technological solutions are a way of providing efficiencies to both you and your Customers. Today’s customers are looking for quality products, top customer service and a rewarding shopping experience.
• Mobile Apps that provide a more customer-friendly experience are the way to go. Options that provide easier to access your Business, place orders, pay and arrange delivery are a must.
• Technical systems that track customer contact and conversion rates are worth installing i.e. record enquiries, leads and sales results. Additionally, systems allowing the operator to check and monitor production and waste is a useful tool for managing productivity and efficiency.
• Automated processing software for manual tasks such as invoicing offers time and dollar savings.

6. Market your Unique Selling Point (USP):

• Concentrate your marketing activities and efforts on selling your USP. Actively promote what makes your Business stand out and be better than the competition in your market.
• Importantly your USP needs to focus on your strengths and uniqueness.
• Critically to be effective your messaging needs to appeal to your target market, your audience’s needs, and what they care about.
• Your USP must be memorable and answer the customer question, ‘what makes you different from the competition?’.  It is more than a slogan, a catchword or a phrase.

7. Contact Blackburn Accounting:

·         We are experienced in business matters and will help you find ways to get thru the maze.