What to Do When Your Customer Can’t Buy as Much?
An inflation or rise in the cost of a measurable basket of goods and services compels a shopper to buy less. That rate of change from buy-the-usual-amount to buy-less-at-the- same-cost is of course called the Consumer Price Index. CPI is what most economists prefer to use in predicting and explaining inflation. For smaller businesses, that usually causes a direct set of reactions. It cost you more to make the same marginal profits. That also means you can’t buy the same amount of labor hours.
The key thing to remember here is that as small business owners, you were first compelled to write a business plan before you sought resources to implement your ideas. Periodic and unpredictable inflation should have been, and should always be calculated within the sustainability formula of doing business. So, what does that look like? In the simplest of terms, reflect on your grandparents’ admonition to always “save for a rainy day.”
Consider smart adjustments in how you manage personnel and marketing, knowing that no condition is permanent in commerce and basic economics. Also, there is no such reality as an inflation-proof business. Especially for small businesses. There is only excellence in management, foresight and planning. Make that and keep that as your aim.
The VendorshipJourney TM is powered by more than 65 years of high-level executive government management, procurement and appropriations experience to better position any company, large or small, to sustain valuable longer-term partnerships with government to satisfy the shifting dynamics of constituent need.