Here are five ways small business owners can get prepared and get ahead amid economic uncertainty and rising inflation.
Co-Founder, Rhoback Activewear, Member, U.S. Chamber of Commerce Small Business Council
Inflation has continued to rise at staggering levels. Small business owners are often disproportionally impacted by rising costs as they don’t have the same ability as larger companies to absorb them. Data from the MetLife and U.S. Chamber of Commerce Small Business Index says 85% of small businesses are concerned about the impact of inflation, and 67% have raised prices to cope.
At Rhoback, we have seen the worldwide supply shock on raw materials raise product costs faster than we have seen in our five-year history. With ocean freight and air freight prices increasing four- or five-fold, we are spending more and overnighting goods to secure inventory and meet demand. Meanwhile, it is becoming more expensive and more important to compete for great talent. We’re investing more in our current team and spending more to attract top talent.
Small business owners who use this time of uncertainty to evaluate their business model, plan, and forecast their financials can outpace the storm. Here are five ways to create opportunity in an uncertain time.
Invest in new products and services
Use this time to innovate and separate yourself from competitors. At Rhoback, we are investing in research and development to position ourselves to compete with and challenge the biggest activewear brands over the next five years.
Invest in your people
Grow those around you, whether that be through incentives, training, or process. No small business can be successful without empowering its team, no matter the current challenge.
Have a plan and pay attention to your finances
Even if the old military adage holds true that no plan survives first contact with the enemy, you will be in a better position if you’ve formalized your goals and financial targets. As the price of goods rises, it’s important to monitor the health of your margins and cash flow periodically.
Reconsider your pricing
This is always a delicate balance. With the rise in product costs, there will be more pressure on business models. Explore how you can set your business model up for long-term success while continuing to meet the needs of your employees and customers.
Join your local Chamber of Commerce to stay abreast of the biggest issues facing small businesses and how you can effectively lobby for the policy changes that your business needs. Our state and federal representatives will be better equipped to make decisions when they hear directly from the job-creating small business owners that are the backbone of the American economy.