Rising inflation over the past year or so has been felt by the majority of economies around the world, and the UK is no exception. As reported by Gov.UK, the Bank of England increased interest rates to 4% from 3.5% in February. Inflation can be a major challenge for small business owners as rising costs of raw materials and difficulty in securing debt funding can eat into profits and make it tough to stay afloat. However, this is not the first time the world has experienced high inflation, and in this article by Global Translations UK, we’ll explore a host of strategies small business owners can implement to minimize disruption to business activities and continue being profitable.
Revise Your Prices
An increase in the prices of raw materials is a hallmark sign of inflation. This especially affects businesses that manufacture products and need to incur costs of procuring and transporting goods. However, service-based businesses are not safe from increased costs either as they still need to bear the cost of higher utilities, transport, and more.
Many business owners struggle with increasing their prices owing to the prospect of losing customers. However, the flip side will result in you consistently paying more for goods, while earning lower revenue than before, which serves as a double whammy for any business. The best way to at least break even during periods of high inflation is to increase prices in line with market forces, while this may drive some customers away, others will be willing to pay higher prices especially if you have established a strong brand image and provide quality product offerings.
Digitize Your Business
Keeping costs in check and streamlining business processes are two key pillars for keeping your company financially healthy during inflation. The easiest way to streamline operations will be to digitize the business, especially paperwork. Whether it be financial, marketing, or legal documents, start scanning and saving all documents as PDFs. Additionally, consider subscribing to a secured cloud-based storage service to safely save these documents, and have the option to access them anytime, anywhere. Here is a tool to help make your PDF smaller and easier to share.
Digitizing documents will result in savings of up to hundreds if not thousands of pounds a year. This money can directly be reinvested into the business to afford increasing costs, digital marketing efforts to find new customers or other important business projects.
Find Unique Ways to Market Your Business
In times of inflation, small businesses can struggle with spending big on digital marketing which is one of the best ways to promote products and drive sales. However, there are a host of other cost-effective strategies businesses can experiment with that provide great returns as well:
- Partner with Other Businesses: Teaming up with other businesses to cross-promote products is a win-win for both parties. Additionally, consider creating bundle offers with the best products from both businesses. As a result, not only will you drive higher sales but split the marketing expenses as well.
- Offer Discounts: As reported by Chron, offering discounts is a great way to increase footfall in your physical or online store. However, this doesn’t mean selling items at a loss. For instance, you can provide 10% of items and still make a profit on the sale. On the other hand, customers will be satisfied with the purchase and can come back if it meets their expectations.
- Ramp Up Organic Marketing Efforts: While paid advertising gets you eyeballs, organic marketing when done right can establish a compelling brand image that leads to customer loyalty and the long-term success of the business. This can include regularly posting engaging content on social media, interacting with customers through handles, and utilizing current trends to increase brand visibility. To learn more about best practices for content marketing, click here.
Inflation can bring about challenging times for businesses, however, as discussed in this article there are various ways for them to continue flourishing. Streamlining business operations through digitizing, paired with the utilization of content marketing will help to keep costs in check while continuing to build a loyal customer base.