Managing costs is always a critical part of ensuring profitability as a small business, but the pain and challenge of doing so can feel greater in the face of the inflation triggered by pandemic supply chain issues and strong consumer demand.
This is something many business owners have never faced before, so we have curated tips on how to cope:
- Manage cash flow. You need to know when to pay the bills strategically and how much cash you have on hand at any given moment. If you’re not using software like QuickBooks, consider doing so (the SBDC at UW-La Crosse has online classes on this!)
Check out more on this topic from America’s SBDC and Wells Fargo. - Cut expenses if and where you can. If you can find a suitable, more affordable substitute product, do so. If you no longer use or make the most of a service, cancel it. If you can renegotiate supplier pricing, at least ask.
Explore this area more plus other tips from American Express. - Improve productivity. This can be achieved in myriad ways: automation through technology/software, streamlined processes and scaled-back product offerings.
Read further with the Harvard Business Review. - Adjust your pricing. This could be added fees or just raising your rates. Don’t be sneaky, but don’t belabor the fact, either. Just be transparent and realistic. Think slow and modest.
Find more ways to structure your price increases without losing customers from SCORE. - Move your money around. You might be able to earn interest or refinance debt to your benefit the bottom line.
Read more tips from The Philadelphia Inquirer. - As always, check in with your trusted advisers. Seek the advice of your financial adviser or certified public accountant. Or consider contacting your nearest SBDC consultant for no-cost, confidential assistance. It’s OK if you’re brand-new or just haven’t reached out in a while; we’re here to help.
