12 Rational Tips On How To Stop Inflation As An Individual and Small Business
Inflation sucks.
But the brutal truth is...
Most people love complaining.
You see people all over the web and at a Denny's near you blaming large corporations and the government. Are they to blame? Yes, but each individual and company has its own ability to respond.
Recently, someone on Twitter took offense to my tips for fighting inflation as individuals (these are to follow). Here's what they said:
"Cutting all those things is also breaking capitalism. If less people are buying groceries, they cut more jobs, because they're not going to take a hit in profits. Same with healthcare. If only 5 of 10 people are going to the doctor, those 5 will end up paying more."
They suggest that people continue to buy more food, so more people get fat, and we all can live glutinous and unhealthy lives.
That's an insane way to think about inflation—being able to continue to buy more for cheaper.
We all have a level of response we can make to minimize the impact of any challenging situation.
But simply pointing the finger and complaining while we stuff our faces full of Doritos, drive brand-new cars, and suck down a case of beer isn't likely to solve anything.
The greatest threat of inflation to individuals who make an above-average household annual income is a threat to their lifestyle.
When that happens, the complaint choir begins. People fall into shock as if they don't know what to do other than complain. But it's difficult. It is never pleasant for anyone to make sacrifices after living a comfortable life and tying their self-worth to materialistic things. It’s like being locked out of a house you’ve lived in for years. You’ve gotten used to the luxuries and comforts of your home, and now you have to start from scratch. It’s a feeling of loss, even if the situation is a necessary step toward a better future.
So, instead of complaining, let's all fight back against inflation in some way:
Get your personal expenses under control.
1/ Eat less: This one will piss people off, but it's true. Most people can eat far less food and survive—even thrive.
2/ Stay healthy: Exercise, eat nutritious food, and do everything possible to avoid doctors.
3/ Save rather than spend: Stop buying crap you don't need. Simple!
4/ Enjoy the free pleasures: Get outside. Explore a nature trail. Visit a park.
5/ Sell excess and buy used: Sell what you no longer need and opt to buy used for certain things instead of new.
6/ Cancel unused subscriptions: This is pure waste. Cancel things you don't use. Focus on fewer, better things.
7/ Create more value and don't get fired: Don't expect a raise without generating results or taking on a higher-level position.
Despite inflation, making better use of your money can make life just as enjoyable.
This is also true if you own a small business.
5 ways to fight inflation as a small business.
Small business margins are being squeezed because as gross profit remains consistent, costs are rising.
In my business, I've seen a tremendous increase in material prices. For example, a brake for a Boeing 737 cost $15,000 a couple of years ago. Today it's north of $30,000.
There are many reasons for this, and every industry is different, but we've had to adjust.
These are five tips I'm using to reduce my small business costs without torpedoing the company:
1/ Reduce Waste: Look for areas in your business that are leaking waste. This can be inventory, processes, and people. Make lean thinking a company core value.
2/ Cancel Subscriptions: If you're not using something regularly, cancel it. We're canceling wasteful SaaS, printer leases, and other unnecessary subscriptions that, over time, we got complacent with.
3/ Reduce Headcount: Look at your employee roster and see if any teams or people aren't producing the results they were hired to achieve. This can be difficult, but nobody should be paid for poor performance.
4/ Increase Performance: We're focused on improving our performance in every department. We're recruiting high performers, and everyone is responsible for critical KPIs. We use the Standards System to facilitate this.
5/ Inspect Your Supply Chain: Find ways to reduce costs without compromising quality. Ship a bit slower, buy a different brand, buy used when it makes sense, and any other way to recapture some margin.
Inflation does hurt, but complaining about it for more than five minutes won't help you solve the problem.
Get creative, and your decisions today can become a habit, even in the good times.
