Inflation has been growing at its fastest clip in more than 40 years, and it affects small businesses in multiple ways. It increases the prices businesses pay for supplies and materials, raises employee wage expectations and forces owners to consider passing along those additional costs to their own customers.
What can businesses do to keep inflation at bay? We asked business owners how they are combating inflation, and how technology is helping reduce its effects. Here’s how they responded:
Using a cloud-based smart POS system
As a restaurant, rising food costs have been challenging to manage without increasing prices. We’re leveraging a cloud-based smart point-of-sale solution called Upserve that integrates with our accounting system, RASI, to constantly adjust our product sales forecasts—allowing us to place more accurate, consolidated food orders with our suppliers and take advantage of market timing and economy of scale. This same tech reduces our labor costs by automatically accepting online customer orders for both pickup and delivery and prints the orders directly into the kitchen without manual entry. This also saves time and improves accuracy.
—Jeffrey Beach, owner, Rainbow Asian Cuisine, Johnson City, Tennessee
Collecting data for target marketing
We have been collecting more data about our visitors and customers to better market to them, and at a cheaper cost. For example, we send out a post-purchase survey with questions about gender and age—which allows us to segment our email and SMS text messaging marketing campaigns. This results in less spent on marketing—offsetting our cost increases and keeping our customer prices more stable—and helps us generate more sales because our marketing is more targeted than ever before.
—Steve Moriarty, president, Moriarty’s Gem Art, Crown Point, Indiana
Deploying software that frees up employee time
The roofing industry has been dealt repeated price increases on almost all materials over the past 18 months. As a way to alleviate this inflation, we’ve invested heavily in technology to operate as leanly as possible without sacrificing on the outcome for our customers. A couple of things that have helped us offset the high material costs are an all-inclusive customer relationship software that allows us to manage all interactions from any device and aerial imagery software that can create accurate measurements for our team in under five minutes. These two software programs alone give us the ability to bid on hundreds of additional projects every year and save us about $100,000 annually in manpower. Most companies in our market use large call centers to contact potential customers and confirm appointments. We’re able to do very similar functions from a laptop or mobile phone with custom automations.
—James Kennedy, owner, Grapevine Pro, Matawan, New Jersey
Moving to a hybrid work model
My overhead costs have gone through the roof, and I’m having trouble retaining my best employees because I can’t keep paying them their wages in full. Moreover, our suppliers have increased their prices. To offset these cost increases, we have moved to a hybrid work model in which our employees have to come to the office only twice a week. The result has been mutually beneficial: We save thousands of dollars on overhead costs each month while the employees cut their commute costs. In this regard, technology has helped a lot because we use tools like Zoom, Slack and Google Workspace to ensure efficient communication and collaboration among team members. Without these tools, the shift to hybrid work wouldn’t have been possible.
—Erin Neumann, CEO, Be Aligned Web Design, St. Louis
Providing automated customer support tools
In any luxury or service industry, the need to have live staff managing customer service increases costs and, in turn, customer prices. By using technology to create omnichannel customer service through chatbots, automated phone help and customer texts, we have been able to reduce our staffing while streamlining our assistance apparatus. This helps lower our business costs, gives us more flexibility in our pricing and helps us battle inflation.
—Omid Semino, founder and CEO, Diamond Mansion, Beverly Hills, California
How is your business reducing the impact of inflation? Share your insights in the comments section below!Print this article