Until now, most experts believed that the current inflation problem would fade away as we close out the year. Now, both the Fed and economic experts have accepted the reality.
You may have already made a few changes as a business owner to stay ahead, but if not, you need to gain an edge now. Especially for those companies who still have problems with capacity and hiring, owners must take steps to make their businesses as inflation-proof as possible.
Take these steps to prepare…
1. Revisit Your Pricing
You should do this multiple times per year, but consider this current inflation period a huge kick in the butt to think about raising your prices.
This decision can be difficult, especially if you feel you have very loyal customers who you’ve built great relationships with. However, these great customers should understand that the value of your product/service will increase as time moves forward.
Of course, you don’t want to price yourself out of the market. Study your competition constantly and see how their prices change.
After last year’s events, many businesses have stayed in recovery mode and haven’t found that balance between getting ahead and offering fair, competitive prices. Take this chance to get ahead and dial in your prices in this current environment.
2. Improve Your Cash Flow
Understanding the importance of cash flow is one thing, but utilizing the tools available to you to maintain a steady cash flow is another skill entirely.
ActionCOACH has developed THE cash flow management formula that uses the following five factors to maintain and increase cash flow:
- Number of Transactions
- Average Dollar Sale
At a bare minimum, you should know these five critical drivers of cash flow in your business. Now is a great time to find the one driver holding you back and improve it as the fourth quarter begins.
3. Handle Your Debt
Paying down some of your debt makes a lot of sense in the face of potential inflation.
Do you have loans or credit cards that you can pay off or even reduce the balance on? Try and clear off your plate as much as possible in the coming months.
Diligently address your debt now – and understand that your competition likely has debt too. Getting ahead of it now will free you up immensely when inflation creeps up.
4. Measure Your Productivity
Companies have “re-opened” for a while now. Now that the “new” new normal has settled in, measure productivity in your business and look for ways to optimize it.
Clearly, productivity has fallen at a number of firms throughout the country during the last several months. Your business is certainly not alone in this regard. Now that we’ve entered the recovery phase, you should assess productivity in planning sessions or with time-tracking tools.
Use weekly meetings and one-on-ones’s with your team to see how on task your workers are, and how well everyone has utilized time and energy.
While things may appear difficult, this serves as a good moment to evaluate all elements of your business, from how well your communication system works to where you could be squandering otherwise important resources.
If you have the resources, examine some of your regular, day-to-day activities see where technology might help assist, streamline, and speed up how you get things done.
By automating some of the more fundamental, day-to-day chores, you not only save money in the long term, but you also free up your staff to focus on more important duties and responsibilities, which boosts productivity—essential during an inflationary era.
The businesses who can quickly and effectively automate tasks will have lots of time on their hands to work on thriving, not surviving.
For an upcoming business challenge like inflation, know that you are not alone. Other businesses will have the same problems you do. Therefore, you need to take ownership/responsibility of your current state, and hold yourself accountable for future challenges/opportunities. Blaming inflation or making excuses will get you nowhere.
Want the ultimate form of accountability? Reach out to us. We’ll share BIG learnings at our events, effective strategic planning, and proven business acceleration strategies in 1:1 coaching. Contact us to learn what may make sense for your business.