It is a sign of how quickly inflation has increased that, from May 2021 to May 2022, the Consumer Price Index (CPI) increased by 8.6%, as noted on the Entrepreneur website.
However, high inflation is hardly an issue limited to the United States, as 60% of advanced economies have been battling the same problem. If you run a business, you could have seen many of its ongoing costs rise — but how can you help yourself to rein them back in?
Streamline your expenses as far as practically possible
When you look closer at your corporate running costs, you could notice that not all of them are strictly necessary. For example, if you are currently sourcing, say, your office space and online connectivity separately, you might be able to save money by obtaining them together.
Keep in mind that renting a serviced office from BE Offices would give you access to a dedicated workspace, high-speed Wi-Fi, onsite recycling points and free telephone calls, too.
Encourage your clients to pay you sooner
Doing this can help you to improve your company’s cash flow, as you wouldn’t have to wait quite as long before paying vendors and investing in previously unexplored opportunities.
However, the especially crucial word here is ‘encourage’. You don’t want your clients to feel under too much pressure to pay you earlier than usual, as they are likely to be facing their own struggles with inflation.
So, you could gently nudge these clients in the right direction by offering discounts for early payment, and start requesting upfront deposits just for larger products or services.
Foster competition between vendors
You need to get supplies from somewhere, but that ‘somewhere’ doesn’t necessarily have to be the same vendor time and time again. In fact, it can pay off handsomely if you strike deals with multiple vendors.
That way, if one of them raises their prices, you could switch to a different vendor — and perhaps, in the process, incentivise the original vendor to do what they can to reverse their price hikes.
Keep as many of your existing employees as possible
You might already be committed to doing this, but there could remain a need for you to redouble your efforts. That’s because your employees are likely to have been hit hard in the pocket as a result of inflation-driven increases in prices attached to everyday items.
Hence, these employees could be eager for a rise in their salaries. If you are unable to pay your workers more, you could instead offer them perks that would incur less expense for you personally — such as a wealth of remote-working options.
Implement cost-saving practices that you would likely be able to sustain
According to a recent New York Federal Reserve survey mentioned by NBC News, consumers anticipate the annual inflation rate sitting at 5.7% by the fall of 2023.
That figure is much higher than the Federal Reserve’s 2% target — underlining how important it is that, as a business owner, you plan for the long haul with your inflation-proofing measures.