Many business owners continue to be concerned about the rising costs of seemingly everything. Alex Shvarts, the CEO of FundKite, a FinTech company in New York and Miami, joins us on the latest episode of The Small Business Show to share how small businesses can continue to adapt during this inflationary period.
Key Takeaways
1. Shvarts notes how small business owners should closely monitor the costs of goods and adjust their prices more frequently to avoid shrinking profit margins. Delays in adjusting prices can result in significant financial strain.
2. “Inflation affects customers as well,” says Shvarts. To maintain customer loyalty, businesses can implement rewards or loyalty programs to balance price increases, making customers feel valued despite the rising costs.
3. Establishing strong relationships with distributors and negotiating fixed prices or bulk purchasing agreements can help small businesses manage rising costs more effectively. This might involve creative solutions like picking up goods directly to save on delivery costs.
4. Traditional bank loans may not be the best option for every small business. Revenue-based financing, which doesn’t rely heavily on credit scores, can offer more flexible capital solutions tailored to a business’s cash flow.
5. With no immediate relief from inflation expected, small businesses must prepare for ongoing economic challenges. This includes maintaining cash reserves, regularly analyzing business performance, and staying agile to adapt to changing conditions.
"Emotions are 90% of failure—don’t let them drive your decisions. Stay focused, analyze your business weekly, and be proactive in managing both costs and customer relationships." — Alex Shvarts.
