Inflation is a natural part of the economic cycle—it’s the cost at which products like gas and groceries and services like entertainment and health care increase over time. But when inflation surges, rising costs reduce purchasing power, leading to tighter profit margins. One strategy to combat high inflation is to stay lean and mean. But another plan to consider is developing a strategy for growth.

Emerging from high inflation stronger than before

If you are comfortable with your business’s expansion potential, you can decide to invest to grow when everyone else is pulling back. Here’s some strategies to consider:

• Beef up your website and investigate whether you can expand into online sales
• Look at your pricing strategy to find new niche markets—start by targeting your top tier competitors to analyze their weaknesses
• Make sure your company’s financial statements are current and your personal net worth statements are up to date
• Develop a one-to-five-year financial forecast and set achievable targets – this is a priority
• Investigate whether expansion will require more capital and if so, bring in a like-minded partner with capital to invest
• Consider purchasing a commercial property as a permanent home for your business—you can lease out unneeded space for added cash flow

Other tips include:

• Talk to your accountant to make sure your corporate structure is designed for growth—you may need to set up more than one company
• Talk to your financial institution to see if you can set up short term lending like a line of credit to take advantage of pricing opportunities
• Develop a marketing plan to reach and service your client base
• Investigate the services offered by BDC (Business Development Canada)
• Ensure your IT platform is up to snuff and will give you the critical reporting you require
• Seek out provincial and federal grants—it takes work but doing the research is worth your while
• Join the Better Business Bureau

Talking to an expert will help you decide on the best strategy for your business. Don’t hesitate to contact us to find out how Coastal Community can help.