5 Practical Steps to Manage Inflation

managing inflation

Inflation is a reality for businesses of all sizes and in all industries.

Impacts include increases in costs of raw materials, labour, transportation, and more.  Businesses of every size need to adapt and optimize their operations to stay competitive during inflationary times.

Here are a five strategies that businesses can use to optimize their operations during inflation:

  1. Diversify your revenue streams:
    • Diversifying your revenue streams can help to reduce your dependence on a single product or service and increase your resilience during inflationary times. This can include diversifying your product line, expanding into new markets, or developing new revenue streams through licensing or franchising.
  2. Increase prices:
    • Straightforward, it’s the first line of defense against rising costs.  The downside is that this approach can also lead to a decrease in demand for your products or services. It’s important to do market research to understand your customer’s willingness to pay and make sure that your prices are still competitive.
  3. Streamline operations:
    • Hunt-down and reduce waste, increase efficiency, and consider the benefit of automating expensive processes. Reducing costs will free-up internal cash, and ultimately make your business more nimble.
  4. Look for alternative suppliers:
    • Rising input prices can have a significant impact on your bottom line. To mitigate this impact is to look for alternative suppliers that can offer the same quality materials at a lower cost. This can also help to reduce your dependence on a single supplier and reduce your risk of supply chain disruptions.
  5. Invest in technology:
    • Investing in technology can help to increase efficiency, reduce costs, and improve productivity. High impact areas can include investing in automation, data analytics, and digital marketing.