August 16, 2024 Avilla Area Chamber Team
Owning and operating a small business, whether it’s home-based or a brick and mortar, can often be challenging, especially when you add in the obstacle of inflation and and the importance keeping on budget.
When you can find a balance between saving money for yourself and being able to pass it along to your customers, you’ve got a winning combination and one that you don’t want to ignore, as it will not only help keep your budget on task, but it will keep your sales thriving, and your customers happy to be getting your awesome products and serves at an awesome price.
One of the first steps to optimizing your finances is to take a good look at your operational costs. Look over your expenses with a critical eye and identify any areas in which you can cut costs without hindering your products and services quality and excellence.
If you are able to, request lower interest rates for your credit cards and speak with your suppliers to see if you can receive price breaks or discounts on orders. Also consider buying in bulk to help save money on smaller orders, and look for other vendors who offer the same quality, but at a more cost effective price.
Something else you can do is to ensure that your space is energy efficient through the use of LED lighting or smart thermostats, using renewable energy, by sealing air ducts, adding insulation, or updating your equipment and systems to the latest technologies.
You can also increase your profits by utilizing the just-in-time inventory method, which keeps inventory levels as low as possible by only receiving products from suppliers when they are needed, which can help your business reduce storage costs and keep inventory fresh.
Look over marketing and advertising expenses and determine which avenues are proving to be good investments and discontinue those that aren’t. Also look at any subscriptions or software that you’re using for marketing or social media and evaluate whether or not they are necessary to your operations or if you can downgrade if you are not using all of the features available because they do not pertain or are of value to you.
Additionally, look at work hours. If possible, adopt a adopt a remote work model to reduce overhead costs associated with office space and consider outsourcing non-core activities to freelancers or specialized firms to save on employment costs.
Implement methods such as dynamic and value-based pricing, which will help to keep your pricing on point with your products and services value.
A few ways that you can pass savings along to your customers during times of inflation and keep generating profits for your business are by initiating a loyalty or VIP program, which ultimately rewards repeat customers. You can also create promotional discounts, so be sure to stay transparent about any price adjustments that may occur.
Your key to success with saving money so that you can pass it along to your customers is to remain proactive in cost management processes, during inflation and through times of deflation.