Small-business owners that have felt the crunch over the last two years were hoping that things were going to rebound a little bit in 2022.
But that’s not how things are shaping up.
No, it looks like small-business owners that have already had to deal with shutdowns, a crazy labor market, supply chain disruptions and a whole host of other problems are now going to have to go toe to toe with historic levels of inflation.
It’s already ugly and many predict it’s only going to get even worse in the next couple of years, too.
How will inflation affect small-business owners in 2022 (and beyond), you wonder?
Let’s run through that right now!
Inflation Is Just Getting Started
While economic experts across the country argue about how bad inflation really is, all of them agree on this—things are rough and are only going to get rougher (at least in the short term).
Some say that inflation (year-over-year) sits somewhere around 8%. Others suggest the number is a little bit higher—and others still say that it’s quite a bit worse than that.
What we do know, though, is that we are seeing record inflation numbers not seen in 40 years and small businesses are going to have to find a way to navigate this new landscape.
Worse, we know that short-term help isn’t around the corner.
Experts believe that inflation is going to continue to fly high for at least another year or two, maybe (only just maybe) settling back down after that.
Buckle up. It’s going to get bumpy.
Customer Reactivation Is A Huge Piece Of The Success Puzzle
Savvy and strategic entrepreneurs and small-business owners looking to avoid the recession crunch are going to need to lean pretty heavily on customer reactivation campaigns.
The most expensive thing a business will ever do is convince complete and total strangers to give them their hard-earned money.
Once you get a customer, though, you have to really scramble things up to lose them—but the last thing you can afford to do (especially in a tight economy like this) is ignore them or forget about them.
Take advantage of your in-house marketing lists. Lean on email marketing campaigns. Reach out to past customers and try to sell them new products or ongoing services.
Your existing customer base is going to handle the bulk of the heavy lifting helping you get through this economic downturn.
Joint Ventures Are As Good As Gold
Small-business owners will also want to lean pretty heavily into joint venture opportunities, reaching out to fellow entrepreneurs and small-business owners in their community to sort of pool their marketing resources.
Joint ventures (JVs) are always a powerful tool for building and growing a business. But they become an even more potent weapon for smart marketers when the economy gets bumpy.
Small-business owners would be smart to start building these partnerships now, brokering JV deals that are mutually beneficial and becoming even more active in their small-business communities to see how they can all help each other weather these tough times.
Streamline Your Offerings
It isn’t at all going to be unusual for consumers to see restaurants and small-business retailers start to tighten up their offerings, with service operations doing the exact same thing.
In times of plenty, there’s nothing wrong with having a full-sized menu like the Cheesecake Factory (regardless of what kind of business you are running).
When things get a little lean, and inflation starts to skyrocket, people begin to pinch their pennies a little harder, and having a broad offering can do you more harm than good.
Streamline your offerings, cut back on your overhead and find ways to cut costs without cutting corners.
The important thing here is to still deliver incredible value to your customers, making doing business with you a no-brainer, without having to live on the razor’s edge of a profit margin squeezed away by record inflation.
Find Ways To Grow Your Back End
At the end of the day, small businesses are learning pretty quickly that a lot of the money is in the back end.
Customer lifetime value, overall order value and recurring payments (as well as upsells, downsells and cross-sells) are all huge pieces of the puzzle to make it through inflation like this.
The more small businesses can grow their back end, the more resilient they are going to be.
Inflation hurts everyone, but it hurts small businesses more than maybe anyone else. Already operating on tight margins in a business landscape that is more competitive than any other time in human history, runaway inflation has the potential to wipe out the fortune—and the future—of many
entrepreneurs across the country.
It’s critical that small businesses build as much resiliency as possible as quickly as possible, using the tips and tricks highlighted above to help them get through this tough time.
Better times are around the corner (they always are). But you need to get your business around the corner to enjoy them.