Post-pandemic, we’re all beginning to feel the pinch when it comes to our money, none more so than small businesses. Inflation is having a negative effect on these smaller establishments, and many are having to make changes to stay afloat.
There are ways that businesses can keep on top of inflation from investing in growth to applying for a merchant cash advance to help with cash flow. Read on to find out more on how to manage rising costs.
Why is Inflation Happening?
Inflation is happening constantly within the economy but it’s only recently that we’ve been hit harder by the effects. The inflation that we’re experiencing currently means that almost everything that we pay for in our day-to-day lives has increased somewhat, whether that’s petrol prices, energy prices, or the cost of your weekly shop.
The rise in prices that we’re experiencing is mostly due to the pandemic and the economic recovery as a result. Supply and demand also have an impact on the price of goods and services, for example, if a product in demand is harder to get, the price tends to go up. Prices also tend to rise if there has been an increase in production costs.
Inflation this year is hard to ignore and is having a knock-on effect on small businesses around the country. Below, we’ll look at some of the ways that inflation can impact a small business, as well as ways to manage it.
Inflation makes the price of almost everything rise, whether that’s goods or services. When running a business, there are many costs that you may notice increasing in price, from the energy that you use on-premises to your internet provider increasing monthly payments or if you work in hospitality, you might’ve noticed the price of various ingredients and stock increasing too.
During this time, small businesses should expect higher costs for the products and services they need to run their business efficiently. This brings us to the next point…
In line with cost increases, small businesses are having to increase their own prices to manage this. The cost increases that businesses are incurring from suppliers have a knock-on effect and means that to make the same amount of profit, they must increase the price of the product or service that they offer to their customers. This can be risky as regular, loyal customers may notice the price increase and struggle to accept it. However, to survive as a small business in such a time of high inflation, changes may have to be made to stay afloat.
Inflation makes it harder for small businesses to make a profit. As mentioned previously, businesses will have to increase the price of their products to cover their costs. Even if businesses do this, they can only increase the price by a small amount – too much and you end up losing customers! This makes it more difficult for these small businesses to make a profit, and in turn, makes it harder for their business to remain successful.
How to Manage Inflation
There are ways that we can manage inflation and the impact it has on small businesses. Having a plan to help cope with this means we can minimise the damage, and give your business the best chance of survival, and even success.
The levels of inflation that we’re seeing currently will eventually level off but for now, there are three main options that businesses can consider.
1. Stay small
If you’re not ready to grow your business, or understandably you’re worried to do so with the way inflation is currently, you must commit to cost-cutting and reductions. For example, to keep up with inflation, cutting overhead costs, as well as spending means you can save and improve your cash flow – with that, you can invest in marketing to help drive sales.
You could also invest the money you have inside and outside of the business so that you can keep up with inflation and give your business the chance to stay afloat.
The other option is to grow your business. The idea behind this is that if you commit to growth, you can generate enough profit to keep on top of inflation. Investing in your business means that you can improve it for the better, for example, investing in marketing to reach more of your target audience and gain new customers, or investing in technology that results in higher productivity.
Growing alongside inflation gives you the chance to keep your head above water and make your business a success.
This is another option that small businesses have in times of need. If you find that you are struggling to manage your overheads, there are many loans that you could choose from to free up some cash flow – whether that’s a short-term loan for an emergency payment or a merchant cash advance for funds quickly and easily.
If you’re looking to grow in line with inflation, a traditional bank loan or equipment loan could be advantageous to use to invest back into your business, improve productivity or make improvements.
Four Effective Tips to Improve Labor Management in Companies
Businesses worldwide are always on the hunt for ways to improve their processes and add more efficiency to day-to-day functions. Of course, labor management is one of the major aspects of every company that demands continuous attention and improvement.
Every business understands that effective labor management is essential when it comes to increasing the productivity, safety, and efficiency of every project. The managers bear all burden to ensure that the labor is working effectively to meet the needs of supply and demand chains.
Here are some effective ways to improve labor management in your company for the best of your business.
1. Use Standardized KPIs
It can be hard to hold someone accountable for their performance when there is no evidence to back up the claims. In such circumstances, the labor deserving of praise may be left out, and those who need improvement may continue to waste company time and resources. Of course, such practices can cost you a lot of time and money in the long run.
Hence, smart companies worldwide are using Key Performance Indicators (KPIs) as a tool for worker motivation and accountability. These indicators help them better understand why certain standardized goals exist and their role in making the company succeed.
2. Incorporate a Software
Managers have a lot on their shoulders in addition to managing the workforce. A few people cannot keep an eye on everyone throughout the day. They need Kaizen Software to find the best solution for labor management. This way, the managers can find time to pay attention to many more important matters.
Efficient management software is being used worldwide due to its countless benefits. They offer security, better communication, and enhanced tracking to make your business more efficient. Hence, your business will have a better opportunity to grow and bloom.
3. Ensure Safety at the Workplace
Every workspace has its own challenges. However, everyone can agree that industrial workers have more challenges when it comes to safety. After all, they are surrounded by heavy machinery and face increased chances of accidents, injuries, and even fatalities. Hence, it must be a top priority to make your workplace safer.
You can start by looking into the hazards in your workspace and minimizing them one by one. In addition, it is also important to ensure that all your workers have access to safety gear at all times. Caution can save more lives than building an elaborate regime to care for injured workers.
4. Keep Workers Posted
Whether a construction site or a chemical industry, there can be new hazards and precautions for workers every day. A little negligence in the workplace can lead to a regrettable accident. Hence, it is always a good idea to keep your workers informed about current events.
Knowledge about company procedures and safety rules can reduce insecurity among workers and increase their efficiency. It is best to let your workers know that all their questions will be answered. This way, they can feel more comfortable seeking your guidance instead of finding out by trial and error.
10 Key Strategies for Managing and Engaging your Employees
Effective employee management and engagement are crucial for small businesses to foster a positive work environment, maximize productivity, and retain top talent. Small business owners need to prioritize their employees’ well-being, provide growth opportunities, and create a culture that promotes engagement and collaboration.
Here, we will explore ten strategies and practices for employee management and engagement in small businesses.
1. Clear Communication and Expectations
Clear communication is vital to set expectations and ensure alignment between the business and its employees. Regularly communicate goals, priorities, and performance expectations to your team. Provide feedback and recognition for their achievements and address any concerns or issues promptly. Encourage an open-door policy and create channels for open dialogue and feedback.
2. Training and Development Opportunities
Investing in training and development opportunities for your employees demonstrates your commitment to their growth and success. Identify areas where employees can benefit from additional skills or knowledge and provide relevant training programs. This can include workshops, conferences, online courses, or mentoring programs. Encourage a culture of continuous learning and support employees’ professional development.
3. Employee Recognition and Rewards
Recognizing and rewarding employee contributions is essential for fostering motivation and engagement. Implement a recognition program that acknowledges outstanding performance, teamwork, and achievements. This can include verbal praise, written appreciation, or tangible rewards such as bonuses or incentives. Regularly celebrate milestones and accomplishments to show appreciation for your employees’ hard work.
4. Work-Life Balance and Well-being
Promote a healthy work-life balance and prioritize employee well-being. Offer flexible work arrangements when possible, such as remote work options or flexible scheduling. Encourage breaks and time off to prevent burnout. Provide resources and support for physical and mental well-being, such as access to wellness programs or employee assistance programs. Show genuine care and support for your employees’ overall well-being.
5. Foster a Collaborative and Inclusive Culture
Create a collaborative and inclusive culture that values diversity and fosters teamwork. Encourage open communication, idea sharing, and collaboration among employees. Foster an environment where everyone feels valued, respected, and included. Embrace diverse perspectives and leverage the unique strengths of your team members to drive innovation and growth.
6. Performance Management and Feedback
Establish a robust performance management system to set clear goals, provide regular feedback, and evaluate employee performance. Implement regular performance reviews to discuss progress, identify development areas, and set new objectives. Provide constructive feedback that focuses on both strengths and areas for improvement to support employee growth.
7. Empowerment and Autonomy
Encourage autonomy and empower employees to take ownership of their work. Delegate responsibilities and provide them with the necessary resources and authority to make decisions. Encourage innovation and creativity by allowing employees to explore new ideas and approaches. Trust their expertise and provide guidance when needed.
8. Career Growth and Advancement
Support your employees’ career growth and advancement within the organization. Provide opportunities for skill development, such as stretch assignments or cross-functional projects. Offer mentorship programs or coaching to help employees navigate their career paths. Create a clear path for advancement and communicate the potential growth opportunities available to them.
9. Team Building and Social Activities
Organize team-building activities and social events to foster strong relationships among your employees. This can include off-site retreats, team lunches, or recreational activities. Encourage team bonding and camaraderie to enhance collaboration and create a positive work culture.
10. Continuous Improvement
Establish a culture of continuous feedback and improvement. Encourage regular check-ins between managers and employees to discuss progress, challenges, and goals. Solicit feedback from employees on processes, policies, and workplace initiatives. Actively listen to their suggestions and make necessary improvements to enhance the work environment.
Effective employee management and engagement are critical for small businesses to thrive. By prioritizing clear communication, providing training and development opportunities, recognizing and rewarding employee contributions, promoting work-life balance and well-being, fostering a collaborative and inclusive culture, and implementing additional strategies such as performance management, empowerment, career growth, team building, and continuous feedback, small business owners can create a positive and engaging work environment.
Investing in your employees’ success and happiness not only benefits them individually but also contributes to the overall success and growth of your small business.
Secure your startup’s future by watching the big corporations
Welcome to Startups Weekly. Sign up here to get it in your inbox every Saturday morning. Starting next week, it moves to Fridays at 12 pm PT.
As a startup founder, wouldn’t it be awesome if you could predict the future a little bit more than you currently do? It turns out you can: By paying close attention to what the behemoths in your space are doing. Last year’s AWS Re:Invent set the direction for a lot of what Amazon is doing this year — including where it invests. Re:Invent 2023 is coming up soon.
Google I/O revealed that Google is investing heavily in computational photography, large language models and all things AI. As a startup, you can use these data points and draw a line into the future: Can you align yourself with the big-picture trends? Are you missing anything?
This week, at Apple’s worldwide developer conference WWDC, the company took the wraps off its AR/VR headset. Priced at $3,500 it won’t be a commercial success, but as a startup, you’d be very silly not to pay attention: It is a complete game-changer for startups.
Startup valuations are taking a pounding
After a frothy few years of don’t-call-it-a-bubble, it seems like the inevitable market correction is here. We’ve seen wave after wave of tech layoffs, and it seems like investors are starting to take a more realistic view of their investments, starting to mark them down.
Marking down an investment doesn’t necessarily mean drama; it refers to the common process of adjusting the value of an investment asset to reflect its current market value. In the case of VC, that often happens if the valuation turned out to be a bit on the optimistic side. Investors will typically mark down investments to avoid overstating their portfolio’s worth. In a nutshell, it’s best practice to acknowledge potential losses before they are realized. That’s what is happening now — and perhaps should have been happening for a while, as Rebecca argued late last year, when she noticed that a bunch of startups had quietly marked down their own valuations.
Jeremy Abelson and Jacob Sonnenberg, both at Irving Investors, argue that if you haven’t yet, you probably won’t grow into your 2023 investment valuation.
Just in the past few weeks week, we had another handful of examples of this:
Life is a highway
The EV space is exploding (sometimes literally) at the moment, and there seems to be a huge amount of stuff in motion in the world of transportation.
Mercedes just got permission from the state of California to start selling a car that can self-drive without having to hold the wheel or look at the road. No doubt this’ll set Elon Musk’s little temperature gauge to “furious” as the company’s cars do attract a federal tax break but come up short on the self-driving front in its native California.
Price is often brought up as a major hurdle for EVs, but Volvo snuck out a small SUV that can cruise along for 275 miles and has a sub-$35,000 price tag. That still isn’t pocket change, but it’s a lot cheaper than a lot of the EVs on the road. Meanwhile, Fiat showed off a city vehicle it’s working on that made both Harri and myself squee with delight.
Safety is another theme across TechCrunch’s transportation coverage: Smarter cars should, in theory, mean safer roads. In practice, Waymo had to explain why one of its autonomous Jaguars ran down a dog in San Francisco last month, and Transportation’s National Highway Traffic Safety Administration (NHTSA) recently proposed a rule that means all new cars and trucks would need to have emergency systems that “would have to be capable of stopping and avoiding contact with a vehicle at speeds of up to 62 miles per hour.”
Remember what we said about legislation driving innovation and opportunities for startup? That proposed NHTSA rule falls into that category. Thought experiment: Could your company tap into that shift somehow?
Apple sets the pace
While Apple isn’t really a startup, it is the world’s first $3 trillion market cap company, so in a week where our servers have been melting from all of the exciting news that came out of the WWDC keynote, I wanted to highlight some of the things that are most interesting to startups and startup founders.
One thing worth paying attention to is the Apple Design Awards, which often foreshadow large trends in design and user experience best practices — along with what the Cupertino-based software giant celebrates at the moment.
Another trend worth paying attention to from Apple is its focus on health and safety: It released a check-In feature to ensure people get home safe, a nudity filter to shield you from unsolicited real-life aubergine emoji and mental health mood tracking. All of that is specific to this WWDC, but it continues a trend: Fall detection, car crash detection, ECG to detect heart events, and lots of other health and safety indicators. It has made it easier to find and disable AirTags that might be used for stalking, and a Safety Check and lockdown mode, which takes your iPhone off the radar to get away from an abusive partner (more from our security team here).
As a startup, all of the above should give you pause for thought: There are big trends at play here that Apple clearly wants to continue to invest in. Apple has gone heavy into the privacy of your data, and leaning into security, safety, mental and physical health and more. Build something truly innovative in these spaces, and you have the world’s most valuable company validating that these are problems worth solving.
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