Today’s watercooler discussions may focus on pinching pennies where you can.

Small business owners are feeling the squeeze of inflation. When costs rise, profit margins shrink, and owners must pivot to keep their business profitable.

According to the Bureau of Labor Statistics, high inflation rates are driven primarily by significant increases in food, shelter, and gas prices. Increased energy prices, supply chain disruptions, and labor shortages are all byproducts adding to business owners’ expenses.

With so many cost increases, what can small businesses do to combat the ever-rising inflation?

1. Reduce your expenses where you can.

• Be intentional about where your money is going.
• Review your current spending and determine if it aligns with your strategy, mission, and budget.
• Cancel unused services or reduce office supplies where you can.

2. Stock up on necessary supplies and have multiple suppliers.

• If there are items you use regularly or need for your business, buy as many as you can at once. Bulk discounts may be offered with certain suppliers.
• Having one supplier for every item your company needs makes sourcing simple. But if you have multiple suppliers, you have more options and can compare pricing and even utilize them when your other suppliers are out of stock.

3. Raise prices wisely.

• Evaluate your products and services. Identify what is the most profitable.
• Don’t increase your prices so much that it causes customers to purchase from your competitors or causes them to not purchase at all.

4. Prioritize customer service.

• Show your customers that you care about their satisfaction. They will be more likely to do business with you in the future, even if you raise prices.

5. Use technology.

• Take advantage of Artificial Intelligence (AI) and self-serve customer options. These can reduce costs and take pressure off your existing staff.

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For more information, check out BBB’s BizHQ. Contact your Better Business Bureau by calling 216.241.7678 or emailing info@cleveland.bbb.org. Interested in becoming BBB Accredited? Find out how you can apply for BBB Accreditation.