Over the past couple of years, small businesses have faced many different challenges. The pandemic plunged the nation’s businesses into tough situations that had to be solved quickly in order to survive. Post-pandemic, a new problem has come about. The single most important problem U.S. business owners are facing today is inflation.
According to a survey conducted by the NFIB last month, 28% of respondents ranked inflation as their biggest problem. This category beat out nine other typically problematic categories, including poor sales, cost of labor and taxes. Just a year ago, only 8% of respondents cited inflation as their biggest obstacle.
Meanwhile, recent data from MetLife and the U.S. Chamber of Commerce discovered that 85% of small business owners surveyed had big concerns about inflation. Similar to the NFIB survey results, 1 in 3 listed inflation as their top business concern.
How Inflation Affects Small Businesses
So, what’s changed? As the nation has slipped into tough times, small business owners have been forced to raise prices because the cost of their own goods have skyrocketed to an all time high. This is especially true for businesses that fall in the wholesale, manufacturing, retail trades and construction sectors.
Businesses have been struggling to deal with the rising costs of inflation since the pandemic started; it simply fast-tracked the inevitable. As supply chain issues grew, goods were harder to come by and prices increased rapidly. A Business.org survey reveals that an astonishing 92% of small business owners surveyed have dealt with rising costs since the beginning of COVID-19.
Small Business Tips on Dealing with Inflation
- Raise prices. The current climate has resulted in over 80% of small business owners increasing their prices in an attempt to counter inflation and continue their operation. While it’s an understandable solution, keep in mind some of your customers may not accept this decision.
- Cut expenses. In addition to raising prices, take a look at your overhead costs. Cutting certain expenses can help you manage inflation. For example, many business owners have reduced their inventory to save money.
- Focus on growth. It is also important to focus on growth by increasing marketing, revisiting your pricing strategy and investing in your business. These efforts can help you boost revenue and stay ahead of inflation.
- Secure outside financing. A great way to continue investing in your business is to secure outside financing. Small business funding can help you fuel further growth efforts, create a cushion of cash and bridge any cash flow gaps.
Where to Get Small Business Financing
Especially during times like these, it’s critical that you secure the right type of financing for your business from the right lender. Not all lenders are created equal, and neither are their financing products. An option like a merchant cash advance, for example, will help you gain access to cash in as little as 24 hours. A traditional business loan could have you waiting weeks or months for approval.
It’s also important that the lender you choose specializes in working with your business type and industry. They should have years of experience in helping small businesses like yours. With the right strategy, your business can weather this period of inflation and come out the other side more successful and stronger than before.
Michael Hollis is a Detroit native who has helped hundreds of business owners with their cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.