You finally achieved your goal of owning your own business. It’s small and family run, but it’s booming and the support from family and friends is phenomenal. So, why aren’t you turning as much of a profit as you should be?
It’s a sobering fact that even as overall income goes down among the average family, prices of necessary goods are going through the roof. This gives buyers less money to work with, thus hampering your profits. Here are three of the culprits.
We all like to eat. We kinda need food to survive and many people do without any food on a regular basis. Yet, the price for food has risen about 5% in the past year. That’s more than in the past 20 years. What does this have to do with small business? Everything!
When prices on things of necessities go up, consumers stop spending on other things. The larger businesses take a hit for sure, but the small business owners can be easily wiped out if too many necessities take a hit in price.
Contrary to popular opinion, the US Postal Service is still very much in business and in order to send a letter through snail mail, we need those stamps. However, with the invention if email, the need to sit down and write a letter has diminished greatly. In most cases, we can now send a text message, email, or shoot a line through messenger.
Writing letters takes time many of us don’t have. This raise in price might actually work in your favor as a small business, especially if you run a company where communications are made on a daily basis. The basic internet package for a small business will pay for itself well over five times throughout the life of your company. So, email away.
There is no material object more important to most than the home they live in. Whether it’s a house, trailer, rv, cabin in the woods, or a shack you built with our own two hands, there’s no place like home. However, it is becoming more expensive to own or rent a place to live.
Some say the problem is that there are not enough places to live for the billions of people that exist. Do, demand is high and supply is low. The effect of a higher house payment or monthly rent, again, takes money out of the consumer’s hands that they could be spending on your product.
As a small business owner, be aware of the changing economy. Make sure to research the median income of the community you settle in and cater to their disposable income and you will survive anything inflation decides to throw at you will be expertly dodged.