With an annual inflation rate of 8.6%, businesses in all industries are having to make contingencies to stay afloat and weather the storm. It’s the biggest financial news story of the year, and it is worsened by post-COVID labor market challenges.
No matter what the future holds, it’s clear that you’re going to need a solid mix of offense and defense to propel your business forward. Cleaning companies are as in-demand as ever, so you have plenty of competition to ward off as well.
Here’s what you can do to beat inflation so that your cleaning business thrives, even as the economy slows.
Stock Up on Your Supplies
The commercial cleaning product market is worth $17.3 billion globally. There are plenty of commercial cleaning supplies that you can choose between, but you now also have to contend with supply chain issues that are hurting just about every sector.
When the supply chain is disrupted, you’re more likely to experience price hikes and fluctuations. Expect inflation rates to further hamper the supply chain and make some of your favorite products harder to come by.
Now is the perfect time to reassess any cleaning supply contracts you have so that you can lock in the best prices for the foreseeable future. Reach out to other suppliers and diversify your supply chain, so that you always have options.
Optimize Your Company’s Productivity
Becoming more productive is one of the best methods of combating inflation. Wasted time is costly, and prevents your company from reaching its potential.
There are a number of things that you can do to make your cleaning company more productive, including:
- Keep your meetings brief and on-task
- Promote constant training and learning
- Add regular incentives to boost performance
- Use apps and software to make your systems more efficient
- Know which parts of your company to outsource
Making your cleaning company more productive will keep it lean and profitable, which is what you want to be in the midst of inflation.
Examine Your Budget and Expenses
The best thing any company can do right now is manage cash flow and expenditures. Hiring a certified public accountant (CPA) can help you budget and develop a plan for overcoming inflation.
These professionals will pinpoint every area of expense and will let you know what kind of return on investment (ROI) you’re experiencing. They’ll help you set goals for each quarter and year so that you’re staying profitable and eliminating wasted spending.
Manage Your Price Strategy
After examining your books, it’s also crucial that you figure out if your prices still make sense. During periods of inflation, both consumers and businesses are having to tighten their wallets, so passing the cost along to your customers is a tricky proposition.
Take a look at the current price model your cleaning business uses, and first explore if there are any upsells or premium tiers that might become popular. You can also increase prices in certain areas while keeping them the same in others. Any price raises should be done delicately and in a way that makes financial sense. Be careful not to appear as though you are “nickel & diming” your clients or they will seek services elsewhere.
Become More Liquid
The biggest thing you can have during inflation is cash in the bank. Individuals and companies become strapped for cash during inflation, so you always need to build your coffers and have money that you can get your hands on.
This will solve a lot of problems and can prevent financial shortfalls and setbacks. Always set aside some money for a rainy day whenever you get the chance, and set savings goals for each budget session.
Market to New Customers
You must always be willing and able to find new customers to keep your company afloat. When you’re able to attract new clientele, you can weather the storm and bring in new money. Take advantage of every marketing outlet that you can, including:
- Search engine optimization (SEO)
- Content marketing strategies like blogs and vlogs
- Search engine marketing (SEM) with paid advertising
- Social media content and paid advertisements
- Paid ads in local publications
Learn specifically what kind of customer you’re going after, and target them through dedicated campaigns. Keep your marketing efforts consistent throughout this economic downturn and your company can grow and see the other side of it. And know your numbers! When marketing during tough financial times, every dollar MUST provide a return. Track everything and only increase marketing in channels that you know are working.
Battle Back Against Inflation
Inflation is a natural part of the economic cycle, so it doesn’t have to be the boogeyman – as long as you have a plan. The tips above will help you out when you’re trying to battle back against inflation. Your cleaning business will be armed to weather the storm.
Debbie Sardone Consulting has answers to your questions, and resources to help you get started. To learn more about the Cleaning Business Fundamentals (CBF) program or the Cleaning Business Profits (CBP) group, contact us.
