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September 11th, 2023

Inflation is here:

Six Actions you can take to improve your SMB’s Financial Health.

The Consumer Price Index, which measures the increase in consumer goods pricing, increased 9.1% in June. What can SMBs do to protect their business?

 

“May you live in interesting times.”  SMB owners are ready to say enough is enough! Times have been challenging for business owners, from the pandemic to supply chain shortages, civil unrest, and worker shortages. And frankly, to most SMB owners, it is no surprise that inflation is back. 

SMBs are feeling the impact of inflationary pressure. According to a study by Business.org¹

  • Almost all business owners have experienced increased costs on supplies and services to run their business (92%, with at least 70% saying the increase was over 20%!)
  •  In response to the price increases, 89% of small businesses have raised their prices, causing further concerns. 
  • Sixty percent (60%) of these business owners expressed concern for the long-term financial health of their business. 
  •   Almost half (47%) have seen decreased margins.
  •   And with customers complaining (37%) said they have received customer complaints), three out of ten SMB owners believe the higher prices will deter customers from purchasing their products and services, resulting in additional financial pressures.

Businesses haven’t seen inflationary pressure like this in almost forty years. While the Federal Reserve is looking to take additional steps to address this, SMB owners can take steps right now to address this in their own business.

  1. Create and manage your cash flow plan: Cash flow is the lifeblood of any organization. Make sure you understand how much money is coming in and going out. Not sure how? The investment in an accountant can save you money in the long run.
  2. Track your expenses – and address areas where you are overpaying: an aggressive look at expense management is suitable for your business at any time, and even more so now.   Be sure you keep track of each expense, particularly where costs are rising, and identify those areas where you can make a change to save money.
  3. Actively manage your inventory; watch for inflationary pressure and, where possible, lock in purchasing contracts when rates are low.
  4. Employee costs:   This is a challenge when combined with the “Great Resignation” and the difficulty in hiring qualified staff. Examine specific ways to optimize labor costs, including increasing productivity (through deeper employee engagement) and reducing costs by reducing hours and hiring contract workers. In addition to saving labor costs, contract labor can provide greater flexibility for your business as the economy improves.
  5. Optimize your marketing costs: investment in growing your business is a necessary long-term business play. Look at the return on investment of your marketing activities and roll back on those that are not positively impacting your bottom line. 
  6. Moving to a less expensive workspace: The impact of remote and hybrid work may mean you need less office space. In addition, there may be less costly options available. Consider the total cost of the move in your calculations and determine if this is the best way to save.

How Wiresurfer can help

For many SMBs, internet and telecommunication services are an area of significant investment. The thought of finding and comparing services can take days and hours – time that many business owners don’t have in the face of these other challenges. Wiresurfer enables businesses to search, find, and compare features, prices, and performance for communication services to ensure the best solution for their business. Wiresurfer can save companies 35% off the cost of doing it themselves through comparison offers and our ability to ensure you get the best price with the best providers available.

 

Visit Wiresurfer to see opportunities for your business to save money for high-quality telecommunication services.

 

https://www.business.org/finance/accounting/effects-of-inflation-on-small-businesses/

Liked this insightful article for your business’ future? Why not share it with a friend or two so they also start preparing for the Smart Working? 😉

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