Everyone is feeling the effects of inflation. For small businesses this means a dip in customers and cutting back on inventory (among much more). Read on for tips on how to prepare for the long run of high inflation.
Improve Cash Flow
According to Forbes, small business have two options: commit to staying small or commit to growth. Both of these tactics are different ways to manage your business until inflation returns to a more normal range.
If you plan on maintaining the status quo, the goal is to save money and improve your cash flow. There are a variety of ways to do this including cutting all nonessentials and finding ways to minimize production costs. Another way is to focus marketing efforts on your current customer base.
After you save money you have to invest it wisely. Your investments should be outpacing or, at the least, keeping up with rising inflation.
Commit to Growth
The second option is committing to growth. The goal of this tactic is to generate enough revenue to stay ahead of inflation. There are several ways to stay ahead including evaluating your pricing strategy, increasing marketing, and investing in your own business.
Of course, there are several ways to invest in your business. One way is through investing in technology to improve productivity. Another is through applying for a small business loan or taking out a line of credit. The Federal Reserve expects six more interest rate hikes in 2022, so the sooner you take a loan out the better.
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