Inflation simply speaking is when the prices of “stuff” increase compared to a previous period. In 2021 SA’s inflation rate was 4,55%. In July of this year, annual consumer inflation reached a 13-year high of 7,8%. We are not unique. In the US, 2021 average inflation was 4.7%. This year, US monthly inflation figures have ranged from 7,5% to 9,1%, figures not seen since 1981.
Here’s the thing though. If you were “caught off-guard” with the current inflationary environment, it is clear you had your head in the sand.
There are no quick solutions, and there are no easy solutions. But we also tend to make things either too complicated, or too simple then what they really are.
The below should be common sense, but then, Mark Twain said the problem with common sense is it’s not that common.
So here we are in an inflationary environment, a perfectly good time to pay attention to, and even do the following.
- Have a plan, strategy, roadmap – call it what you want.
The value of a plan is not limited to what you have as a plan, but in the process to get to that plan. It is the process that prepares you to be quick to react to changes, because your plan would have considered different scenarios.
Your plan must be a living document that provides a roadmap for what you want. It must list what you want and by when you want it. It must have actions and names next to each of those wants so that people can be held accountable. And it must be measured against progress, at least monthly.
- Do not scoff at organic growth.
Your next client is in your current data base.
It’s great to get new business, but don’t overlook existing and past customers. These could turn out to be very lucrative sources of new revenue.
You already have relationships with them, so offer new products, innovations, and outstanding service. Try and help them succeed while expanding their budget with you. Think about ways to get them to spend money with you and not someone else.
- Ramp up marketing efforts.
If you don’t already have a Marketing Plan – probably because you don’t have a plan – now is the time to do both plans.
Without a plan for what you want, it is impossible to have an effective Marketing Plan to help you get what you want. The value of a Marketing Plan is that it requires you to identify what you want, look at if what you are doing if still relevant, identify your ideal client under the current circumstances, and what message to give your ideal clients.
- Make sure you have the right people for the roles required to get you what you want.
Roles continually evolve. Do you still have the right people for those evolved and evolving roles? You need the right people for today to get you what you want.
- Know your finances.
Your finances are a result of your activity. Your activity is a result of your employees-, client-/customer-, and supplier activities. Have goals for each and track it against your finances.
- Make Retained Earnings a priority.
Retained Earnings are used for four things –
- To reward the owner/s;
- Pay for stuff you want to do in the future with, in, and for the business;
- Reward the staff that deserve it;
- Save some to get you through tough times.
- Surround yourself with the right advisors.
90% of peoples’ thoughts today are the same as yesterday. Your experience is old and outdated. Get people around you that will challenge your thinking and not be afraid to disagree with you. Consider a group of other business owners from non-competing industries, like The Alternative Board®.