Businesses all over the country are struggling to navigate the stress and uncertainty of the current economic climate, with many citing rising costs as their largest source of difficulty. The impact of inflation – particularly on small businesses that don’t have the same ability to absorb costs as larger conglomerates – can be disastrous unless business owners take proactive steps to mitigate loss. As small business financial experts, BradyRenner understands the stress that comes with this uncertainty, but we also know that your small business can navigate these challenges and maintain success with the right knowledge and guidance.
BradyRenner’s combined years of experience make us an excellent resource, and together with a vetted network of professionals well versed in all aspects of business development and financial health, we stand ready to help. Here are several tips to get you started on helping your small business deal with rising costs.
Understand Your Expenses
Small businesses should always be aware of their expenses, but during times of economic uncertainty, this is a non-negotiable. Instead of auditing your expenses on a monthly or quarterly basis, consider weekly reports. The sooner you are able to identify an opportunity for potential savings, the better.
Areas in which your small business can cut back may include:
- Subscriptions. Review your company’s credit card bills to find any unnecessary subscriptions to magazines, news services, or other services. Many times, trial periods require an optional sign up for subscriptions, and cancellations are missed.
- Paper usage. In this digital age, there are few documents still requiring hard copies. Save all necessary documents to the cloud, set up your systems to back up files daily, and save money on toner, paper, and printers themselves by not automatically making hard copies of documents. This will also help cut the need for storage space.
- Downsize physical office space. As we learned during the Coronavirus pandemic, remote work is not only possible but, in many situations, preferable. If you are able to let go of some square footage, you may be able to cut down on your monthly expenses.
- Pay bills wisely. Small adjustments to your bill-paying practices can result in big savings. Instead of paying all of your bills on the first of the month, schedule them for the due date. Additionally, if you have a business credit card with cash back rewards, use that to pay all your bills and then use the cash you receive to pay your expenses as well. Provided there is no additional fee or service charge, this can lower your out of pocket costs.
Moving Forward With Customers
When it comes to your small business’ success, your customers are essential. Keeping them in mind as well as keeping them informed is key, and while you may need to adjust your practices, allowing your customers to guide these decisions will help you stay successful.
Keep your customers prioritized by:
- Evaluating current offerings and eliminating products and services that are not serving your customers.
- Bundling services in order to offer a variety of levels of service options which will save customers money over a la carte offerings.
- Providing sufficient notice if you decide to increase your prices due to inflation – your customers will appreciate having time to prepare.
- Setting aside non-essential or “wish-list” endeavors until the market is more stable in order to continue to offer customers your best during more challenging times.
Looking Towards the Future
Persevering through inflation during a recession can be scary, but your small business can take steps to thrive during this time. By evaluating your current expenditures, limiting spending, and finding ways to cut costs without sacrificing the quality of your products and services or the satisfaction of your customers, your small business can stay afloat during the current economic downturn.
BradyRenner Can Help
With our suite of business offerings including outsourced CFO services, BradyRenner offers the strategic expertise needed for your small business to manage rising costs, with benefits including: monthly financial reports, an analysis of financial issues and priorities, a financial perspective to influence major business decisions, and many other analytical tools that lead to practical solutions.
For more information on helping your small business deal with rising costs, contact the experts at BradyRenner today. And come back soon for our next article exploring how financial advisory services can help small businesses revive their local networks of support.