Inflation is not what it used to be back in the early 2010s. The inflation rate in 2012 was 1.7% compared to an astonishing hike to the 7.7% average as of 2022. In June of 2022, the inflation rate was at its highest at 9.1%
As the inflation rate rises higher, how are small businesses keeping up sales to maintain business success? Let’s find out!
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What is Inflation?
Inflation is the general increase in the costs of goods and services in the national and worldwide markets. It is a healthy element of a budding economy as more rise in costs means increased funds that companies receive to perform well in each quarter.
The Federal Reserve projects healthy inflation rising by 2% each year. If inflation is too low, it can damage the economy rather than succeed. It is also burdensome for small businesses and corporations alike when it is too high as it is now. Inflation must achieve a happy medium where consumers are purchasing more products and services and businesses are reaping these sales benefits.
Reducing Overhead Costs
One way to maintain profits is for small businesses to lower overhead costs. This can be done by:
- Changing the light bulbs to more energy-efficient alternatives.
- Shortening the work day by an hour or two once or twice a week to reduce energy costs spent.
- Find cheaper software subscriptions with the same quality service.
- Order office supplies when needed rather than have it automatically sent every month.
- If you need to order product ingredients to make specific products, only order when necessary.
- Find a new location nearby with less monthly rent.
Get creative with how you lower your overhead costs. Being mindful of how you use your resources is a great way to keep control of them.
Do Subscribe and Save Boxes
Help your customers to save money if they purchase your product often by hosting a Subscribe and Save promotion. For example, if you have a perfume business, do a Subscribe and Save promotion where clients purchase three perfumes at a time and restock their choice of scents every six months.
Make the overall value 10% to 15% off the market price if your clients do a Subscribe and Save program. While you will not be making the full amount on all the perfumes, you will be getting many more sales as other clients flock to the Subscribe and Save deals if it means that they can save money on their favorite products from you.
Run Various Sales Promotions
Even though rising inflation on overhead costs may cause you to have to increase your product and service prices, be sure to run sales promotions often to bring more clients into your business. The perks of saving money, even if a little, are attractive to all clients.
Change over your promotions at least twice a month to keep them interesting. If you sell clothing, you can run different promotions such as:
- Buy One, Get One 50% on T-Shirts.
- Buy One, Get One $5 Pair of Leggings (original price being $10 each).
- Buy 1, Get 1 Free on Accessories (limit 1 deal per client).
- Buy 3, Get 1 Free on Graphic Tees.
Integrate Social Media Marketing
The flyers posted at different businesses are fun and flashy. However, it can incur marketing costs from designing, printing, and distributing them. Instead, integrate social media marketing into your marketing plan to reduce overall costs. Post current promotions, reels to show your different products, and any business relocation or other updates.
What is your small business doing to combat inflation and maintain sales? Start a conversation below with other small business owners in the comments!