Inventive Ways Small Businesses are Tackling Inflation
No small business is spared from the almighty equalizer that is inflation. Small businesses often find themselves helpless, toughing out the consequences from decisions on high that drip like dominoes until finally reaching their own bottom line. Small businesses, however, are known for their resiliency. Even in the face of unstoppable forces like inflation, small business owners have proven to be flexible and resourceful in ways that their large corporate counterparts can never emulate. This article is a showcase of some small business owner’s unique methods for combating inflation. These business owners come from a wide range of industries and even countries, but their grit and determination is universal.
Taking Advantage of Alternative Materials
“We saw a huge surge in sales when Covid shut down all the local pet stores, so we needed to expand our grow capabilities. Lumber prices and other material prices were becoming more and more expensive. So, we went looking in other places for material we could use for constructing breeding racks and packaging tables. Salvation Army and Habitat for Humanity stores were a great resource because of their used furniture. We ended up buying used pieces of dining sets and wooden bed frames, broke them down, and built the racking and tables we needed. This was a great way to get the material we needed to expand our operation. Of course, the racking looks a little odd, but no one can deny their utility.”
Jeff Neal, Ops Manager, Critter Depot, Lancaster, PA
“When it comes to our business, during periods of high inflation, we often prefer to take advantage of the situation to increase our business’s rate of growth and expansion by applying for a small business loan from banks/lenders that offer fixed interest rates. The reason why is because inflation tends to generally lower borrowing costs, which means that when it is time to pay back the loan, we can do so with cheaper money than we initially borrowed, thereby effectively giving us a good discount on what we need to repay. This then gives us the chance to effectively invest our loan proceeds into beneficial investment opportunities that allow us to better strengthen and differentiate our business, which ultimately allows us to further build our pricing power in the long run.”
Eden Cheng, Co-Founder, PeopleFinderFree, Singapore
Creative Stockpiling and DIY
“I use a lot of chemicals in my business, so the best way that I have found to help beat inflation is to keep as large an amount of stock as possible. With bulk chemicals that I keep by the barrel full, I constantly check on alternative pricing options and suppliers, taking advantage of specials and renegotiating with current suppliers, even so far as trading services for better prices. For the more specialized, smaller products that I do not use daily, I keep limited stock but will specifically buy extra when there is a special running. I aim always to have stock available, purchased at lower prices so that inflation does not have an immediate, negative effect on my Business.
I also have my own range of DIY products, which are essentially exactly what I use every day; it is just repackaged as a DIY product which I then sell to my customers.
This allows me to bring in extra money by selling what I would use anyway,except at a higher price.”
Jack Miller, Exterminator & Pest Infestation Specialist, HowDoIGetRidOf.com
Customer Attraction at all Costs
“To limit the effects of inflation, you can raise the prices of your commodities but make sure that they are still in comparison to brands offering similar products. This method will allow you to earn more profit and give a way to offset the effects of inflation. Aside from that, you can also give out some discounts in order to attract more customers.
But the best-tested method to combat the effects of inflation is the use of social media for promotions in order to increase customers. You can deploy a mini-competition in social media where customers can post videos or pictures about how they use your products. They just have to use hashtags related to your products and to your company. Additionally, you can hire an influencer to promote the competition in order for it to gain traction. This is a sure way to increase customer retention as well as profits even during an inflation period. Nowadays, social media can really save a business from inflation. A business owner just has to know how to leverage it in order to gain something from it.”
Scott Hastings, Co-Founder, Betworthy, Darien, CT
Stamps, Stamps, Stamps
“I run two history-related brands, History By Mail and Historic Cartoons. Inflation directly impacts the daily operations of our businesses. One way we have combated inflation is to purchase large quantities of USPS Forever stamps. We mail out thousands of historic replicas to subscribers every month using USPS First Class stamps. The cost of stamps is rising by 3 cents at the end of August. By purchasing large quantities of stamps before the price hike, we can lessen the immediate financial impact of the rise in cost. We have also had to slightly raise the cost of our products, which poses unique challenges for our subscription customers who are auto-subscribed and are used to being charged the prior lower rate. New customers are charged the new, higher rate, and prior customers are grandfathered in at the lower rate. We thought long and hard about raising our prices, but with the cost of supplies and labor rising, we needed to cover some of the extra expenses.”
Ari Siegel, Founder and CEO, History By Mail & Historic Cartoons, Chicago, IL
Running a small business is a balancing act on a never-ending tightrope; inflation is just one more spinning plate added to the business owner’s routine. In learning more about how small businesses combat inflation, we at Kapitus hope to spark the same creativity for our readers. Not every business solution is bound by rule books. And sometimes the answer to inflation lies in the Salvation Army furniture section.