If you talk to any small business owner this year and ask them the one thing that’s on their mind—above anything else—you will likely hear the ominous “inflation.”
With inflation rates reaching record highs not seen in 40 years and supply chains continuing to be disrupted, the cost of doing business has been skyrocketing. Customers are seeking deals at every corner and being much more cautious with their spending.
So, what is a small business owner to do? If you talk to 100 business owners, you might hear 100 different proposed solutions. You might also hear sharp disagreements on purchasing. Is it smarter to buy all the equipment and goods you need now before prices increase even further, or should you avoid purchasing as much as possible and wait this whole mess out?
Amid all the creative ideas and hoops to consider jumping through, one theme should stick: Leverage everything you have. Here are a few ways you can get started.
Find ways to shed excess capacity.
Particularly if you’re a business in the food or hospitality industry, you’ve seen no shortage of excess capacity since the beginning of the pandemic. What can be done with the extra hotel rooms, empty restaurant tables or even gift certificates that seem to pop up whenever the world around us is in flux?
One idea that might seem outside the box is leveraging a barter network. Businesses often come to my company and similar companies to exchange services and goods. While finding creative ways to shed excess capacity can have a profound impact, not everything you have sitting around will be considered valuable. What outdated machinery or unused parts can you make a little extra money on? If you’re a business that’s been around for years, there are likely several places to start.
Depending on what your business offers, you might also be able to rent out excess capacity such as office space, electronics, machinery or even smaller tools if they aren’t needed at the moment. For restaurants and other businesses in the food service industry, there are tools that can help you sell excess food at lower prices. And, of course, any business with excess capacity that might still be of interest to consumers—albeit in a different context—can always consider creating a sales promotion aimed at eliminating those excess products.
Additionally, check your credit card bill to see what recurring expenses or bills can be eliminated. You might be surprised at all of the things you forgot you were paying for, or you might simply realize that you never really use that one subscription or service.
Appreciate your team.
Don’t forget about the human element. Valuable employees are not easy to find or cheap to replace. Losing one can negatively affect your profitability more than it would in smoother economic times.
Make sure your team knows how appreciated they are, and strive to keep them happy. While it might be tempting from a strictly financial standpoint to cut back on perks, pay or even staff, this is dangerous territory to tread in delicate economic times. Can you afford to wait weeks to fill a position or risk hiring someone who disappoints in a precarious moment? Instead of cutting back, set ambitious new productivity and efficiency goals and reward accordingly.
While much of this might be easier said than done, and not all potential actions will necessarily be applicable to your business, every penny counts in an economic environment like the one we currently find ourselves in. The key is to be thorough in cataloging what you have and what may be able to be used. After all, for small businesses, every bit matters.
-Originally published in Forbes Business Council 9/8/2022