5 Strategies to beat inflation
Inflation is the new buzz word that we are all hearing about and many are experiencing first hand when we buy fuel, get our electricity and gas bills and so on. What practical approaches can a business take to deal with this as we start to feel the winds of change in our faces.
So, let’s look at 5 Strategies to deal with these.
Strategy 1 : Reassess your suppliers
How to: Review your list of suppliers and check the marketplace to see if there are alternative suppliers or alternative products that you could use instead that have not been as impacted by price rises. Looking for early payment discounts or bulk order discounts can add a % here and there that all drop to the bottom line.
Strategy 2: Manage your pricing
How to: By tracking your margins closely, you can identify where you need to adjust and increase your pricing. By doing this you are protecting your margins and your businesses profitability.
Strategy 3: Combating Wage Cost inflation
How to: If you your employee costs are increasing, you should be getting better productivity from your employees. Getting staff buy in is hugely beneficial to the business and addressing wage increases head on can reduce the likelihood of losing staff, particularly good employees who work hard in the business.
Strategy 4: Outsourcing
How to: More businesses are exploring the option of outsourcing. This works well for many area’s of the business and can be much more cost effective than employing staff yourself. Finding a outsource partner who you can build a great working relationship with you and your business can be a game changer for business owners and their team. This is not without its risks and needs to be carefully assessed. Outsourcing can be a great strategy to increase efficiencies and reduce costs in the business.
Strategy 5 Protecting your cash-flow
How to: When things get tight….. “cash is king”. Carefully monitoring your credit customers, watching the aging of your debtors and reducing sales to slow customers are all sensible tactics to employ when managing cash flow. Selling off slow moving stock to convert into cash at discounted prices and negotiating better credit terms with suppliers can help also.