I want to help you build a sustainable, profitable handmade business that makes you consistent income and sales. I only ever teach or recommend marketing, social media, pricing, production and branding tips that I’ve personally used successfully in my own 7-figure handmade businesses.
I'm Mei, from Los Angeles!
starting a business
get more traffic
running a business
make more sales
growing a business
mindset & productivity
pricing & money
selling on etsy
selling on amazon
No business is ever really safe from the unpredictable trends of economic inflation.
Thankfully, there are some smart and creative ways to prepare your business so you can survive and thrive through inflation.
Back when you started your business, you probably already knew that you needed to jump through a lot of hoops just to ensure your business’s success.
You already knew that running a business isn’t easy, right?
The problem is, the economy is largely out of your control and it’s much harder to prepare yourself for something so unpredictable.
Inflation, specifically, is the darkest time that any handmade business can go through.
The scary thing about inflation is losing money.
You won’t be able to make a living out of your business if you’re struggling to make ends meet.
So in this blog post, I want to talk about how to empower your business so it withstands inflation.
Inflation is what happens when the prices of goods and services rise uncontrollably at alarming rates.
Even basic necessities like food and clothing become unaffordable because the average household income does not rise along with those inflation rates.
Sadly, most people can’t keep up with inflation, so making ends meet really becomes a struggle.
Inflation affects small handmade businesses the worst.
Because of the rising prices of basic necessities, people tend to prioritize these and spend less on their wants.
Nobody wants to spend their hard-earned money on things that serve not-very-practical purposes in everyday survival.
Handmade products are usually little luxuries that people can’t afford in place of basic expenses.
And this means reduced income for handmade businesses.
During inflation, business expenses like raw materials, shipping, packaging, rent, and electricity also increase.
So having less income and more expenses eats at our profit margins. This is a formula for disaster.
Inflation really makes it hard for handmade businesses to stay afloat.
So what do you do?
The frustrating part of all this is that you can’t really do anything to influence inflation rates, but what you can do is to make your business sustainable and inflation-proof.
When you’re experiencing a decrease in sales, I know it’s tempting to lower your prices to make your products more attractive to your customers.
But, the first rule of business is that you shouldn’t lower your prices just for the sake of sales.
Lowering your prices will cut further into your profit margins, which will make keeping up with the rising costs of your expenses much more difficult.
You are running a business and this means you have to earn enough money to cover your expenses and make a profit.
Otherwise, you’re not really making a fair living out of your business. So don’t feel guilty about raising your prices.
Since we’re talking about business finances, it is important to manage your cash flow wisely.
Know exactly how much money comes in and out of your business.
During inflation, I suggest that you minimize your outflow by cutting out unnecessary expenses.
For example, audit your overhead expenses and decide which ones are not worth prioritizing right now.
If you have paid subscriptions to apps or tools that you can live without, cancel them for now.
Knowing how to optimize your profit well may help you allocate funds for growing your business even in the middle of inflation.
This is frankly something I didn’t do myself very frequently, and that’s a surefire way for your expenses to get out of hand quickly if you’re not keeping an eye on the ball.
As business owners, we wear many hats and one of those should be being the CFO, the Chief Financial Officer.
All this needs to mean is that you get comfortable with your finances so you’re not operating or making decisions blindly.
It’s always super eye-opening for me to dig into my numbers, especially because how we feel our business is doing, is often not the same as how it really is doing.
Your customers’ buying habits change.
What do your customers typically do to cope with inflation? How do they unwind? What do they do outside of work?
To make more sales even in the middle of a recession, you need to look at what your customers’ lifestyles are like and create products that make their life better and easier for them.
Don’t be afraid to let go of products that aren’t selling well and create new ones that better suit your target market now.
Business survival means redirecting your focus to more profitable products.
For example, you are a handmade skincare business and you notice that your customers are advocating more on self-care during these difficult times.
Maybe you dig a little deeper and find out that they like taking time to make themselves a warm, relaxing bath after a long and stressful workday.
This right here is a good opportunity to explore different handmade bath products that they might enjoy.
Maybe you craft some bath bombs or bath salts. Or perhaps you can also add some scented candles to your catalog to help make their baths even more refreshing.
Your next move should depend on what your customers want – and this is usually to elevate their lifestyle and make themselves feel better.
Again, in times of recession, people prioritize buying needs over wants.
When you create new offers that are irresistible – meaning, they are both a need and a want so buying them is totally worth it – that’s how you find the sweet spot.
Be open-minded and ready to potentially shift your inventory and focus on some new product ideas.
You won’t be able to sell any products if you don’t spend some time marketing them.
You need to keep money coming in, so double up on your marketing efforts.
You need to send out a message to your ideal customers, and tell them that you understand what they need and you have a product that will meet that need.
By doing this, you’re actively telling the world that you’re open for business and getting more people interested in your products.
So whether you’re marketing to older customers or an entirely new audience, never stop marketing your products.
Marketing is the one thing that you should never cut back on, even during inflation.
It is your most important means of keeping your business alive.
Inflation is definitely one of the most difficult challenges that every business owner has to face.
We all can feel the effects of inflation in our everyday lives, so it is important that online store owners like us learn how to survive.
And this means turning our handmade businesses into inflation-proof businesses.
What are you doing to cope with increasing costs? I’d love for you to let me know in the comments and maybe other people can learn from what you have to share.
And don’t forget to check out my YouTube channel for more handmade business tips and tricks!
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