Small scaled business also known as SME’s are most dominant in Africa. The kind business incorporated since the ages. Nevertheless , living in a technological world , stocks ,prices are bound to change taking into consideration our innovations.
These are to help in maximizing our revenues on the market yet economically inflation would set in. A general increase of prices of commodities.How do we structure the spending with its revenue then
*Evaluate your costs and redesign your processes : In every business, there are some costs which are not be incurred or could alternatives which are quite cheaper. Those methods could help save the business falling a victim to inflation.
*Transfer extra costs to your customers.:
Firstly, you must know the type of demand for your products. Elastic demands are 70% to be affected by high inflation because consumers of such products to do away with them at any time. But for inelastic demands like sanitary pads , bottled water or sachet consumers are forced to purchase due to its necessary use. Then your business is at a great stand when you transfer some your costs
*Do your best to retain workers
Qualified workers contribute a lot to the growth of every business. Do well to retain them. During high inflation, workers also seek for higher salaries. Employing set of new employees and adjusting them to work would cause you a higher risk.
* Manage sticks from the supply chain : During high inflation, I would recommend you to go for suppliers with long-term of credit purchase and good discounts. To help your costs not to overflow the revenue of your business.
Improve cash flow- Your business shouldn’t be based on credit sales