To protect your business from inflation, consider implementing these five proven strategies:
- Know What You Spend
- Details: Maintain high-resolution spending visibility across all departments. Ensure that managers are fully aware of where money is being spent and who is spending it. This involves setting up processes and systems to track expenditures meticulously.
- Benefits: Helps in identifying and eliminating unnecessary expenses, fostering accountability, and ensuring that spending decisions align with budgetary constraints (
- Diversify Supply Chains
- Details: Invest in supply chain sustainability by diversifying vendors, identifying domestic alternatives, and stockpiling critical items. Splitting orders among multiple suppliers can also ensure continuity in the face of supply chain disruptions.
- Benefits: Reduces dependence on a single supplier, mitigates risks associated with supply chain disruptions, and helps in maintaining steady product availability despite price fluctuations (
- Make the Right Cuts
- Details: Focus on strategic cost-cutting by addressing operational inefficiencies, renegotiating outdated contracts, and eliminating non-core activities. Avoid across-the-board cuts that could impact core functions and profitability.
- Benefits: Ensures that cost reductions do not harm the business’s revenue-generating capabilities and helps in maintaining operational efficiency and profitability (
- Implement Smarter Resourcing Strategies
- Details: Leverage outsourcing to access global talent pools, particularly in countries like the Philippines where labor costs are lower. Outsourcing can increase operational efficiencies, improve customer experience, and provide scalable workforces.
- Benefits: Reduces labor and occupancy costs, enhances operational flexibility, and allows businesses to focus on core activities while outsourcing non-core tasks
- Enhance Pricing Strategies
- Details: Review and adjust pricing strategies to reflect inflationary pressures. This could involve passing some costs to customers, offering value-added services, or creating new pricing models that better align with current market conditions.
- Benefits: Helps in maintaining profit margins, ensuring that the business can continue to operate sustainably despite rising costs
