Have you noticed the rising costs in groceries, the petrol prices, and other areas? This is inflation. According to the Now CFO website, inflation is the general increase of goods and services over time which leads to a decrease in the purchasing power of a currency. One consequence of inflation is that when it is very high, consumer spending changes and they focus more on essential products and the best bargain. As for businesses, with the prices increasing on raw materials and services, they need to make decisions, and some may not be liked by their consumers.
Inflation not only directly affects your customers, but it has knock-on effects throughout your business. It will affect your plans for your business. It may halt the release of a new or adapted offering. Secondly, you may consider repairing equipment rather than buying a new one. You would want to limit increasing your debt. You may decrease marketing spend and be careful about hiring new staff members. With all these knock-on effects, it is critical to be able to ride the inflation wave like a skilled surfer and here are three skills to mastering the inflation wave:
Skill 1: Check your costs
Where it is possible, keep your costs down. Go through all your business expenses and see where you can cut costs or which you can eliminate. You can look at your subscriptions and see if there are any which are out of date or can be adjusted to meet your current situation. It is important that when you cut your costs, you don’t do it to the detriment of the quality of your product. As this could have a catastrophic impact on your business if you charge the same price for a lower-quality product.
Skill 2: Manage customers’ expectations
For your business to succeed you need customers, but you don’t need to bend and twist to their every whim. Ensure that you advise your clients about how you run your business. Be consistent in your prices and let them know why you have had to increase prices. By having open and clear communication with your customers, they will trust you and continue to trade with you.
Skill 3: Adjust to the circumstances
No plan should be set in gold. You should be able to pivot should the need arise. We unfortunately don’t have a glass ball which can tell us about the future, but we can take an educated guess by looking at the past and consider what the future may hold but we must be able to adjust the plan should the need arise.
By honing these three skills, you will be well on your way to riding the inflation wave like a surfing champ.
Proudly brought to you by the NSBC