Helping Our Businesses Weather Inflation
A blog, from our friends and strategic partner ODEA.
As business owners, we are always tackling the next challenge. We’ve previously shared some tips on how EFBC members and other businesses have weathered the pandemic and ongoing supply chain disruptions. Now let’s share some suggestions on surviving the latest storm to cross our paths, inflation.
Look for Lost Dollars
With everything from raw materials to employee benefits costing more, we are all seeing the expense side of our monthly accounting reports rising. Have you paused to take a deep dive into each line item for any dollars that may be slipping through the cracks? Do you have any monthly or yearly subscriptions that you are not using? Perhaps you switched from Harvard Business Review to Wall Street Journal but never canceled HBR. What about all the technology platforms you are no longer using? Monthly auto renews of those tried-but-never-really-caught-on platforms and technologies may be small but add up over time. (See you later Prezi!)
Spend now. Save later.
With all companies dealing with the same inflation-induced woes, many organizations are offering incentives to their customers to buy more or pay ahead to increase their cash flow. If your own cash flow allows such opportunities to lock in prices or pay-in-full before the next price increase can be significant. Publicly traded companies concerned about their next quarterly earnings report will often more freely negotiate as the end of a quarter approaches, especially if your salesperson can book a large deal from you. (Yes, we’re looking at you HubSpot and Salesforce.)
Get Creative with Cost Increases
There is only so far decreasing your costs will be able to take you in combating inflation. Reality is, most of us are having to consider raising costs as well. Go ahead and consider implementing your own “buy now, save later" deal to lock in your top-tier or most profitable customers. Think about bundling products or services to increase order size with items your customers likely buy anyway. Or what about offering a subscription that eliminates the need for your customers to remember to re-order? It works for Amazon, it just might work for you!
When it Comes to Cost Increases, Communication is Key
You already know this from being on the receiving end of price increases, but communication (like most things in life) is key. Give your customers as much notice as possible that a price increase is coming. Help them understand why you are raising your costs and if they can expect any additional increases in the short or long term. If possible, give them some ways you might be able to help them absorb these costs such as longer payment terms. In short, communicate early and communicate often.
Call On Your Team
Not only are we as businesses dealing with the onslaught of inflation, but we as humans are too. Those utility bills are increasing for us all! Your employees are needing to come up with creative solutions for combating inflation in their personal lives. Ask for their input! Involve them in the process and invite them to impact your organization’s income and outgo just as they are doing at home. With the collective brilliance in your organization and within our community at EFBC, you’ve got the resources you need to weather this inflation storm and keep moving towards sunnier days.