The Big Squeeze

1. Increase productivity and efficiency to reduce costs.
2. Develop a pricing strategy that takes inflation into account.
3. Seek out lower-cost suppliers and negotiate better deals.
4. Review and reduce expenses regularly.
5. Implement cost-saving technology, such as automation.
6. Use hedging or forward contracts to mitigate risks from price fluctuations.
7. Diversify your revenue streams to reduce dependence on any one market or product.
8. Consider raising prices gradually over time to keep pace with inflation.
9. Keep a close eye on interest rates, and adjust your financial strategy accordingly.
10. Look for ways to generate additional income, such as renting out unused assets.

Small and medium-sized businesses (SMEs) can take a number of steps to combat inflation and protect their bottom line. Some key strategies include increasing productivity and efficiency, developing a pricing strategy that takes inflation into account, seeking out lower-cost suppliers, and reducing expenses.

One way to increase productivity and efficiency is to implement cost-saving technology, such as automation. This can help to streamline processes and reduce the need for manual labour, ultimately lowering costs for the business.

Another important strategy is to develop a pricing strategy that takes inflation into account. By regularly reviewing prices and adjusting them as needed, businesses can help to ensure that they are able to maintain their profit margins despite rising costs.

In addition to adjusting prices, businesses can also seek out lower-cost suppliers and negotiate better deals. This can help to reduce the cost of goods and services, which can have a significant impact on the bottom line.

Reviewing and reducing expenses regularly can also be an effective way to combat inflation. By identifying areas where costs can be cut, businesses can free up funds that can be used to invest in growth or to buffer against rising prices.

Hedging or forward contracts can also be useful tools for mitigating risks from price fluctuations. These financial instruments can help businesses to lock in prices for raw materials, commodities, or other inputs, helping to protect against unexpected price increases.

Diversifying revenue streams can also be an effective way to reduce dependence on any one market or product. By spreading risk across multiple products and services, businesses can help to insulate themselves from the impact of inflation in any one area.

In addition to diversifying revenue streams, businesses can also consider raising prices gradually over time to keep pace with inflation. By doing so, they can help to ensure that they are able to maintain their profit margins even as costs rise.

Keeping a close eye on interest rates is also important, as changes in interest rates can have a significant impact on the cost of borrowing and the availability of credit. Businesses should be prepared to adjust their financial strategies as needed in response to changes in interest rates.

Finally, businesses can look for ways to generate additional income, such as renting out unused assets. This can provide a source of revenue that can be used to buffer against rising prices. Overall, by following these tips, SME business owners can take steps to protect their business from the negative effects of inflation and secure their financial position.