As 2022 draws to a close, the news headlines have sounded alarms about a slowing economy. Inflation continues to rise, affecting prices down the supply chain. The rising costs and shrinking profit margins will be even more challenging for small businesses. But even as dark clouds loom, there are always things small businesses can do to hunker down and survive the storm. We have three steps that you can take right now:
- Improve processes
When it comes to keeping your costs low, it may mean relooking your processes and investing money into making things work more efficiently. But, unfortunately, these might be time-wasting processes that make your staff unnecessarily busy. For instance, if they take too much time to find products because your shelving units are out of order, it’s time to fix the shelves, so you cut customers’ waiting time.
For F&B outlets that deliver, running to and from the kitchen to relay those orders while taking orders from walk-in customers will cost your staff time. It can also lead to unnecessary miscommunication, leading to incorrect orders. Instead, consider using an efficient smart POS terminal that tracks your walk-in and delivery orders, and sends them to the kitchen seamlessly.
One way to save money is to streamline and automate processes that do not require human interaction—or at least not as much of it. For example, if you’re a retail store selling products with unique SKUs (stock-keeping units), consider using an inventory system that automatically updates inventory levels based on your sales.
This will save you from manually updating inventory levels whenever someone buys something from your store. It’ll also help you pinpoint areas where you have too much or too little stock, so that you know how much to buy when restocking.
Any technology or app that can make you, or your staff’s life easier and more productive, will contribute to your profit margin. So it’s time to take stock (pun intended) and cut out time-wasting steps in your business operations.
- Stock up inventory
With prices rising quickly, you might think it’s best to stock up and insulate against inflation and supply chain issues – a persistent challenge given the state of world affairs.
But before you start buying in bulk, consider whether holding inventory will cost you more. For example, for small businesses with limited space, the cost of renting additional storage space might increase faster than you can sell the goods. In that scenario, it may be better to hold off the ordering.
If you’re buying in bulk, choose to purchase products with relatively stable pricing. Or sell products that consumers don’t mind paying more for, even with a price increase. One example would be plastic packaging. For many food businesses, the transition towards greener options means many consumers are willing to bring their food containers or pay a higher price to take away their food. Therefore, buying bulk packaging and passing on the cost to consumers may be one way to reduce your expenses.
Another way to assess is to estimate how flexible your supply chain is and whether you can look towards regional and local suppliers to fill in the gaps. International supply chains are vulnerable to extended delivery times and higher transport costs. Therefore, you’ll need to estimate whether you can quickly pivot to an alternative if something happens. You can also renegotiate vendor contracts to lock in prices so that you are not caught off guard next year.
Do you need to expand your cafe by getting a new espresso machine, or consider adding a barber chair to your salon? It’s time to buy the big equipment now, so you don’t have to pay extra to increase prices next year.
- Revisit pricing and promotional strategies
As a small business, you probably have regulars and would want to keep prices consistent for them. Raising prices can be tricky, but as electricity and water prices surge, you might have to pass on the costs to your consumers. Be strategic about these price increases. Instead of dramatic, sudden price hikes across all products and services, be strategic about where and how you increase your prices.
While raising prices isn’t ideal, it may help combat inflation’s effect on your business. Avoid turning off customers with dramatic across-the-board price increases. Instead, raise prices slowly in modest increments and be strategic. Choose areas where customers are less likely to notice. If you’re increasing the prices of goods, consider pricing strategies to differentiate price changes for different market segments. Also, consider how you can cushion these price hikes, for instance, by offering discounts on non-perishable goods. Offer various payment options, such as buy now, pay later options (BPNL) options, or reward customers with discounts if they help to reduce your costs. One way is to offer a 10% discount to pick up their purchase in-store since it helps to lower your delivery cost.
Consider bundled pricing or tiered packages if you are a service-based business such as a spa or salon. For instance, tiered packages can give customers an option to compare between a fuss-free straightforward haircut or choose to pay more for a hair wash and massage. That way, consumers can choose what price points they want to pay.
And whether you run a retail or service business, it’s time to engage loyal customers and attract new ones. Inflation can be unnerving, but it can also attract new market segments. You might, for example, get more price-sensitive customers who switch to your business. Customers like to feel rewarded, so if you don’t have any incentive to keep them returning, it’s time to improve your customer engagement game.
It’s time to gear up with Qashier
To borrow a quote from Albert Einstein, “In the midst of every crisis lies great opportunity.” So while it might feel like 2023 is going to be a choppy year, by taking these three steps above, small businesses can thrive even as inflation and supply shocks persist.
We are here to champion you.
Qashier offers multiple digital solutions, including QR code table ordering, table management (F&B), employee management, customer relationship management (loyalty programs), inventory management, data analytics, and cashless payments, in an all-in-one device.
Additionally, you’ll be able to seamlessly set up within 10 minutes without needing technical expertise. It boasts a user-friendly interface that is simple for anyone to learn and use. If you require assistance, you’ll find 7-days-a-week responsive technical support from the team.
Qashier is also affordable, with prices starting from as low as SGD1/day (in Singapore with a PSG grant), and this includes hardware, software, setup, training and 7-days-a-week local support.
Speak to us to see if Qashier’s Smart POS can meet your business needs. Find out how Qashier’s Smart POS can meet your business needs. Schedule a meeting with us here, call us at (+65) 3165 0155, WhatsApp (+65) 8882 8912, or email [email protected].