How Small Businesses Can Deal With Inflation

Market watchers are debating whether the recent spurts of rampant inflation mean prices are at a peak. Meanwhile, small-business owners are feeling the pain from inflation: The NFIB's survey for July found optimism and profit levels at depressingly low levels. Even if inflation has peaked, we are clearly in an economy quite different from that of recent decades when inflation hasn't been much of an issue.

This is a new world for many small-business owners, so I think there needs to be a discussion on the blog about what exactly can be done about it from the individual perspective. Obviously, one business owner can't alter the macroeconomy, but there are steps to keep the business healthy. Let me kick the discussion off with a few examples:

• Don't cut back on marketing. You may be looking for areas to cut back. Marketing seems expendable—the problem is, you'll be way behind the curve in building your reputation when inflation slows and there are tons of opportunities for profit out there. Read my Q&A with PR expert Kevin McLaughlin for more info.

• Build up personal relationships with suppliers. As I've written before, they might even cut you a break.

• Promote conservation in your business. Tomorrow I have a Q&A coming out with Tim Sanders, author of Saving the World at Work. He gives some practical tips for making businesses less wasteful. You don't need to be a member of Greenpeace to want to reduce your energy costs, especially when those costs are probably taking a big chunk out of your cash flow.

Obviously these steps are just the beginning. I hope to hear more from actual business owners, and write more about this in the future.