Labor costs, supply chain disruptions, gas prices, interest rates and more all contribute to the impact of inflation. Not only is the average consumer experiencing these challenges, but so are franchise businesses.
According to an article by the U.S. Chamber of Commerce, inflation has topped the list of challenges for small business owners for the past year and a half. More than half (54%) say inflation is a top challenge followed by interest rates rising (23%), supply chain issues (23%) and revenue (20%).
Here are six options for taking matters into your own hands and helping curb inflation’s impact on your franchise business.
Actions for Curbing Inflation’s Impact on Business
If your franchise is feeling the impacts of inflation, a proactive approach can help.
Stock up on supplies—If prices for your core materials continue to rise with each order, consider stocking up now. Look into renegotiating contracts with your suppliers and check that all your supply orders are being used. You may also consider substituting products or trying out a different brand.
Examine business expenses—Cutting back on nonessentials and looking for more ways to reduce your other costs can help. Save on gas by limiting pickup and delivery services, adjusting routes, carpooling and reducing the number of vehicles used.
Focus on growth—To stay ahead of inflation, make moves to grow your business. Increase your marketing, revisit your pricing strategy and invest in your business to improve productivity and reduce overhead costs.
Raise prices—While raising prices isn’t ideal, doing so strategically can help you combat inflation while keeping customers satisfied. Avoid dramatic across-the-board price increases. Raise prices slowly in modest increments and choose areas where customers are less likely to notice.
Get employee feedback—Your employees will have a different vantage point to your business and its expenses. Ask for their insight into where more money can be saved.
Protecting Your Franchise
Whether from inflation or claims, Lockton Affinity has insurance to help protect your business.
The right insurance is important in any type of economy to help protect your business in case of accidents, injuries and other losses.
But keeping your policy up to date during inflationary cycles is especially important, as inflation can cause changes in property values, debt ratios and liability exposures.
Ensure your franchise is fully protected by contacting Lockton Affinity today.