It is crucial for businesses to adapt to survive inflation…
In January 2024, the National Bureau of Statistics (NBS) records showed Nigeria’s annual inflation rate hit unprecedented levels, increasing from 28.92% in December 2023 to 29.90%. It was the highest inflation rate recorded in the country since 1996. By February 2024, the rising inflation rate had gone up to 31.70%.
High inflation rates can potentially hurt businesses by causing negative profit margins, especially as they face higher operating expenses. It is therefore now more crucial than ever for businesses to adopt careful planning and strategic decision-making to not only survive but thrive at a time of economic uncertainty.
Here are five actionable steps to navigate and survive inflation successfully as a business owner:
Reduce fixed costs that are not business critical: In times of inflation, reducing unnecessary fixed costs is essential for preserving profitability. Evaluate your business operations thoroughly to identify expenses that are not critical to your core operations. This could include overheads such as office rent, utilities, or subscriptions that can be renegotiated or eliminated. Trimming excess costs will allow you to free up resources and allocate them towards more pressing needs, thereby buffering against rising prices.
Pivot to a provider with better pricing to save cost: Another effective way to survive inflation is by pivoting to suppliers or service providers offering better pricing. Whether it’s goods supply or payment service, explore alternative cost-effective options or negotiate with existing partners to secure more favourable terms. By actively seeking out cost-saving opportunities, you can mitigate the impact of inflation on your bottom line.
Prioritise employee and customer retention: Retaining key talent and loyal customers is critical during periods of economic uncertainty. Invest in employee retention initiatives such as competitive compensation packages, professional development opportunities, and a positive work culture. Similarly, prioritise customer satisfaction through personalised experiences, exceptional service, and loyalty programs. When you nurture strong relationships with both employees and customers, you can boost resilience and achieve stability in your business.
Invest in new growth strategies: While inflation may necessitate belt-tightening in certain areas, it’s also crucial to invest in initiatives that drive long-term growth and sustainability. Evaluate emerging market trends, technological advancements, and consumer preferences to identify opportunities for expansion or diversification. This could involve launching new products or services, entering new markets, or adopting innovative business models. The proactiveness of investing in growth initiatives can position your business for success despite economic headwinds.
Regular Pricing Reviews: Inflation often necessitates adjustments to pricing strategies to maintain profitability and competitiveness. Regularly review the prices of your products or services in light of changing market conditions and cost structures. Consider factors such as increased input costs, market demand, and competitor pricing when determining price adjustments. Communicate any changes transparently to customers and emphasise the value proposition to justify price increases. Staying agile and responsive to market dynamics means you can effectively navigate inflationary pressures and sustain business viability.
How to save cost on your payment collection process with Bani
Remember, navigating inflation requires proactive planning, strategic decision-making, and a focus on long-term sustainability. If you optimise fixed costs, seek better pricing, prioritise retention, invest in growth, and regularly review pricing strategies, you are more than likely to steer your business towards continued success amid inflationary challenges.
You can effectively cut costs on the charges you pay for your payment collection process by adopting Bani’s low-cost options, such as:
- Virtual Accounts for bank transfers
- Bani Shopper for QR payments
- Payment Links
- E-wallets
- Mobile Money and more.
Our competitive and transparent pricing (no hidden charges) will allow you to save more and divert funds to other areas necessary to sustain your business during crunch inflation.
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