Since 1982, the United States has seen inflation as high as it is now. According to CNBC, inflation rose 7.5% in January 2022, the highest rate in 40 years.
This has taken its toll, especially on the consumer price index, and small business owners have been the most affected market affected by the impact of rising prices.
Faced with this situation, many small businesses have been forced to raise their prices or compromise their benefits to their customers, putting the loyalty of their clients at risk and sacrificing their financial capabilities in order to survive.
But there are certain key factors that can help minimize the negative effects of inflation. Let’s take a look at what you can do to deal with this current situation:
Keep a strong inventory and stock on dry cleaning supplies
There is a saying that says “forewarned is forearmed”, meaning if you think ahead of the problem, you might have a tactical advantage on your side. Don’t wait to run out of supplies or for the prices to rise, purchase items in advance to avoid the hefty prices that might come in the near future. Handling the business expenses effectively is a great way to manage inflation.
Adjust to the situation
In the face of sudden inflation, the first option is to increase prices. But if you have a business like a dry cleaner (and not a food company, for example), it’s possible to make a strategic decision and evaluate which services you will make a price change to, and avoid a traumatic impact on your customer’s budget.
Inflation requires adaptation and meeting these challenges with agility will be beneficial in the long term.
Saving the money under the mattress is actually one of the biggest mistakes you can make when it comes to personal finances at a time of high inflationary pressure like 2022, where money loses its value faster than the speed of light.
What is recommended is to invest in things that offer a higher return than the current inflation rate or, at least, that accompany it, such as shares of listed companies.
Think about long-term agreements with your business partners
Opting for a settlement with your business associates is an effective way to protect your dry cleaner from inflation. Ask for a long-term agreement with your supplier, or negotiate with other parties for bulk discounts. This way, you will have a clearer picture of your fixed expenses, allowing you to plan and strategize during critical periods.
Take care of your current employees
Employee retention comes in handy when it comes to avoiding inflation: lose valuable employees and you won’t be able to meet your customer’s demands. So make the necessary efforts to keep the good ones on your side, offering better employee benefits, and flexible working practices.
Reduce business expenses
Evaluate your variable expenses and make a list of what could be reduced without damaging customer services, your employees’ wellbeing, or the quality of your service. Consider moving your store to a cheaper location, cutting down some marketing channels, or canceling business subscriptions that are not a necessity for your dry cleaner.
Economic challenging times can be surpassed if you plan ahead and think strategically. Go for practical ways to overcome it: review your expenses, evaluate your processes, and update and reinvent where it needs it. Take action and act smart to help your company deal with inflation in the longer run.
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