Inflationary pressures on our businesses (and personal lives) have been growing.
Don’t despair! You aren’t completely helpless in this situation. There are things we can do as small businesses to survive, and even thrive in the midst of rising and unpredictable costs.
Here are 4 things you can do now:
1. Know Where Your Money is Going
Now is a great time to scrutinize your costs and find out what is going where. What costs can you cut entirely? What costs can you reduce? Look for recurring subscription payments, other supplier options, and expenses that are just unnecessary.
2. Pricing: Time to Raise Your Rates?
Knowing when to raise your rates can be tricky. Taking the time to evaluate your new costs and the effect on profit margins might just make it an easy decision. You have to raise your rates eventually to keep up with inflation (and to reflect your growing expertise). There’s no better time than now.
3. Increase Your Profitability
You’ve scrutinized your costs and evaluated your profit margins. Maybe you raised your prices. Here are 3 more things you can do to improve your profitability:
- Identify unprofitable customers, services, products, or projects. Develop qualifying criteria to create space for more profitable activities.
- Upsell, downsell, cross-sell… Existing customers are the easiest to sell to. What can you do to improve their experience? Identify a product or service that will benefit them AND increase the revenue value of existing customers.
- Half the profitability battle is keeping some of what you earn. One of the tenets of the Profit First system that I help my clients with is allocating your profit to a separate bank account. If you keep all of your money in one account, you “forget” that it is earmarked for other things: expenses, slow times, and profit. Start putting a % of everything you earn in a Profit account. Pay yourself first.
4. Look for Free Money
There are grants and subsidies available for small businesses in Canada. Most of us don’t even know about them. Take the time to research and apply for different opportunities. Here are a couple of resources to get you started:
If you worked through all 4 action steps, well done!
If you are still struggling, want to dig deeper and need help finding ways to make your money go further? Our Small Business Bookkeeping Audit is for you.
We take a deep dive into your figures to identify how you can tighten your business belt and boost your profitability.
Get in touch today to arrange your Small Business Bookkeeping audit.
Although this blog offers business advice, this content is for general informational purposes only—it is not intended to replace the guidance of a licensed legal or financial professional. Information created by third parties that we may link out to or feature on our site is not endorsed by us and remains the responsibility of such third parties. The Rayne Firm assumes no responsibility for errors or omissions in the content.