It’s no great secret. We all know what’s going on. Inflation. Maybe even hyperinflation. According to most recent estimates, inflation in the United States is expected to hit a 40-year high. The result? Damage restoration business owners and managers face constant pressure to keep costs low and continue to grow their business even as costs rise, labor shortages persist and a recession looms on the horizon. And yet, despite their best efforts, many business owners don’t quite know how to deal with the impact of increasing inflationary pressures.
Fortunately, there are concrete steps restoration businesses can and should take to ensure they survive these trying times. While business remains strong within the sector, smart business owners will follow tried-and-true principles to ensure they protect their business. Let’s take a closer look.
1. Focus on Cash-on-Hand
As interest rates rise, will you have the spending flexibility you need? When inflation rises, the value of your money decreases. And since it takes more money to do the same things, you need to ensure you reserve your cash and keep enough on hand for emergencies. One easy way to do this is to reduce your exposure to bad debt.
2. Keep Spending Under Control
Restoration businesses and restoration management contractors need to make sure they keep spending under control as inflation rises. Undertake steps to decrease your expenses, and focus on ensuring your service is the absolute best. Don’t go hog wild on expanding into new markets that may be overly competitive. And if you do decide to expand or undertake new initiatives, pay close attention that those initiatives make sense for your restoration business. Make sure the money you spend has a greater than 80% chance of returning on your initial investment.
3. Focus on Flexibility
Damage restoration companies must rely on raw materials and equipment. Thus, one of the best ways to protect your business during inflation is to be flexible with your business strategy. Is it time to look at new suppliers? Might there be some savings by switching to a new vendor? You need to be able to adapt to change and not be rigid in your approach to both materials and partnerships. Be open to new possibilities and partnerships and ensure this attitude is built into your company culture.
4. Hire Strategically
Many companies have already stated they are either freezing hiring or even canceling hiring offers that had already been made! This is pretty unprecedented, but we are in unprecedented times. If you need to hire employees, be very careful about how you do it. Never overhire, but at the same time, don’t sell your business short by allowing yourself to become understaffed. A restoration company without enough people will not be able to get the jobs done. You may want to consider investing in some employee incentive programs. It may help you keep excellent employees and attract top talent while mitigating any potential financial impact of inflation.
5. Invest in Cost-Saving Tools
Here’s the problem with a lot of damage restoration companies. They live in the technological past. They are using spreadsheets and paper files. Put simply – they are operating in a very inefficient manner. During times like these, you need to invest in technological solutions that increase efficiency, decrease time on job and inventory mishaps and also increase overall customer satisfaction. And that’s where Assured Software comes in. Our entire reason for existing is to help you streamline your company, increase overall efficiency and, more than anything, cut costs. Want to learn more? Escape the dangers inflation poses by visiting our website and scheduling a demo today!