1. Leverage Technology to Drive Out Other Costs
Making technology investments in digital records keeping or in automated revenue management services to streamline data entry and billing can lower fixed costs that can pay off in the medium to long term.
2. Use Marketing to Retain Loyal Customers
Customer acquisition is expensive but critical as loyal customers can be counted on to keep revenue streams steady and maintain margins. Creating a loyalty program is one of the best ways to incentivize repeat customers. That can be done by offering discounts to repeat customers, rewards programs for frequent customers or any other kind of benefit in exchange for a membership fee.
Customer acquisition is expensive but critical as loyal customers can be counted on to keep revenue streams steady and maintain margins.
These kinds of programs can dramatically increase customer retention rates, reducing the costs businesses would otherwise have to pay to keep acquiring new customers.
3. Purchasing in Bulk to Drives Down Unit Costs
When faced with significant inflation, every dollar a business spends today is worth more than the dollar spent tomorrow. One way to achieve this is by buying in bulk. This is a good strategy during low-inflation periods, and a great one during high-inflation periods. “Spending more to save more may seem paradoxical, but it works,” said Andrew Gonzales, fintech expert and president and co-founder of BusinessLoans.com in a company news release. “The winners will be companies that keep a long view and make smart investment decisions now to help drive down long-term costs.” According to the latest economic numbers, inflation continues to rise at a historic pace. In April, the Bureau of Labor Statistics reported that consumer prices hit a 40-year high, increasing 8.5%. And it’s not just consumers feeling the pinch. A survey released last week by the National Federation of Independent Business (NFIB) found that more than 90% of small employers reported that inflation was impacting their business in some way, with 62% saying it had a “substantial impact.” And, 68% percent of respondents said they “are planning to raise average selling prices in the next three months.” According to the U.S. Census Bureau, a historic 5.4 million new business applications were filed last year, smashing the 2020 record.
Editor's note: State, federal and local government COVID lockdown orders damaged or destroyed many small businesses. It is admirable for government to seek restoration of small businesses by "leveling the playing field," however, government must refrain from future severe actions that will restrict small business operations.