“Inflation” is a popular word these days. It can cause furrowed brows at the grocery store and restless nights of sleep for the business community and American families. Prescription drug prices, gas prices, supply chain disruptions, energy costs, and materials costs are some of the items we’re all struggling with today.
That’s why it’s best to have a solid understanding of inflation and how it affects a fair share of small businesses in the U.S. — and be equipped to navigate it all. Let’s start by learning more about inflation in general before moving on to some tips and inspiring stories from small business owners like you.
What is Inflation?
Let’s start by learning more about inflation and its impact. According to Oxford, inflation is “a fall in the value of money and a general increase in prices.” As you can gather from this definition, inflation affects small businesses. After all, when the prices of materials increase, small businesses and consumers alike will spend more on products.
It’s no surprise that rising costs can dig into your profit margin — especially as a small business owner. If you increase your prices to accommodate the loss to your business, your consumers may be unhappy. It’s a tricky equation to solve. Luckily, this isn’t the first time in U.S. history that inflation has been high. The 1940s and 1970s certainly saw their share of inflation rates go down. As with everything that goes up, it will come down at some point — and costs for families and small business owners will become more manageable.
In the meantime, let’s look at a few strategies to help you navigate today’s higher inflation. Business expenses may be higher than you’re used to. Still, a dash of creativity and the ability to be nimble can go a long way to help you and your business. In fact, some of Guidant’s clients and other small business owners have fought rising prices and inflation concerns recently — sometimes even thriving during economic downturns. Let’s take a closer look at four stories of American small business owners who faced unprecedented challenges and continue to thrive.
Is your business considered “recession proof”? Check out the Top 10 Recession Proof Businesses.
How Four Successful American Small Businesses Battle Inflation and Economic Challenges
Before looking at the top effective tips for addressing challenges like inflation as a small business owner, let’s explore four examples of small businesses that rose despite the odds: A Rustyc Spoon, Falling Sky Brewing, Marble and Granite Solutions, and No-H20 Car Cleaning.
Who are they, and how did they do it? Let’s dive into four different small businesses — across varying industries — to discover how they braved unique challenges and came out on top.
Stressed about the future of your small business? Here’s How to Navigate Business Uncertainty.
A Rustyc Spoon Offsets Rising Food Costs
Who They Are
For A Rustyc Spoon, a father-and-son food truck business that offers culinary spins on classic dishes, rising costs are certainly a challenge. That’s because the food truck business prides itself on making its dishes with high-quality, fresh ingredients. And those fresh ingredients have higher price tags. Maintaining the same level of food and ingredient quality has been difficult for these two.
What They Did
To address higher costs for its ingredients, the business duo now provides customers with a value proposition with larger food portions. Customers know they’re getting 2-3 high-quality meals for the price of one, which keeps customers happy with the costs — and food.
Drawing in more happy customers, A Rustyc Spoon partnered with a local and popular brewery in Pensacola, Florida. This collaboration has allowed both businesses to host community-focused and fundraising events, such as corn hole games for mental health awareness and special catering functions — including a notable event for Navy Federal featuring delectable charcuterie and French dishes. The symbiotic relationship between A Rustyc Spoon and the brewery has also helped boost both businesses. The brewery’s taproom business has skyrocketed, tripling since the partnership. Smart thinking, A Rustyc Spoon!
Another huge contributing factor to their success? The supportive and warm community of Pensacola. Larry Strain’s son and co-owner, Rusty, is a classically-trained chef — and enjoys connecting with local rising chefs and award-winning chefs beyond.
“The culture here has been huge in terms of what it enabled us to do. It just proved to me just what kind of following we had and that we were doing something of value for the community, that they valued us — and it proved to me that we live in a wonderful community. We’ve been community-involved for 20 years or more.”— Larry Strain, A Rustyc Spoon
Discover the inspiring story of how A Rustyc Spoon became an award-winning, top chef-acclaimed food truck in Pensacola, Florida in “A Father, Son, and Foodtruck.”
Falling Sky Brewing Stays Nimble and Restructures for Multiple Income Streams
Who They Are
Inheriting a brewery, bakery, and deli business in one was a huge feat — especially as a business owner new to the food industry. But that’s what Stephen Such did. In 2020, Stephen purchased his favorite local brewery in Eugene, Oregon — during the onset and continued rise of the COVID-19 pandemic. Time and again, Stephen has revamped his business model to offset new obstacles, including the impact of inflation.
As a first-time business owner with a strong background in marketing, Stephen’s commitment to growing the Falling Sky Brewing brand and business kept him steadfast in overcoming these unique challenges.
What He Did
With inflation hitting the U.S., Stephen continues reimagining new strategies to keep the business thriving. To sustain profits and keep reasonable prices, he continuously restructures his business and creates multiple income streams. Stephen says problem-solving and adapting are key to continuing to run a successful small business — especially through uncertainty. Running a business isn’t easy. Nobody can predict how the economy will change. But to Stephen, taking a risk on yourself to pursue your passion and being in control of your own future is worth it all.
By keeping costs low and value high, the Falling Sky Brewing has paved its way to success — even in the wake of a shutdown amid the COVID-19 crisis. While Stephen inherited the brand, reputation, and reviews, he had to start over from scratch in many ways when taking over the business. Since then, he’s learned to adapt and innovate to keep the brewery thriving.
“This has been a challenging year in terms of food costs, gas, and minimum wage increases. You’re trying to do more with less. And yet, consumers don’t want to see substantial increases in food costs. These are all the things we’re looking at and doing to continue growing in a challenging time. Being innovative and creative is a necessity.”— Stephen Such, Falling Sky Brewing
Read more about the story behind the Falling Sky Brewing — and how its quickly grown into a popular location for craft beer enthusiasts and local families alike in “Falling for the Craft.”
Granite and Marble Solutions Innovates with its Model
Who They Are
Donald Benton of Granite and Marble Solutions is no stranger to increasing prices on materials as well as labor costs and supply chain challenges. But even though Donald encountered roadblocks, he didn’t give up.
What He Did
During March 2020, Granite and Marble Solutions experienced a slump as the COVID-19 pandemic led to economic uncertainty and reduced consumer spending. However, as remote work became the new norm, people began investing more in their home spaces. This shift in behavior surprisingly led to a business boom for the company as homeowners sought to upgrade their living environments.
For Donald, the pandemic surprisingly helped boost his business — proving that despite the economic climate, some industries will continue to survive or even thrive.
“The pandemic, overall, was pretty good to get started in [business]. This gave me a leg up, and it’s been an interesting landscape for business.”— Donald Benton, Granite and Marble Solutions
Still, Donald faces new unique challenges as supply chains shift. With the rise of costs, both his labor and material costs increased. To help offset economic shifts, Donald got creative in his supply chain and now focuses on educating his clients. For example, the manufactured, lower-end materials cost nearly the same as the “real stuff” now. That’s why Donald encourages clients to get more bang for their buck on natural stone that will last. Marble and Granite Solutions is now thriving more than ever today.
“My labor costs are going up. My stone costs go up all the time, especially any manufactured materials. So, it’s been a real challenge right now with the inflation driving up the costs of everything.”— Donald Benton, Granite and Marble Solutions
Read Donald Benton’s story of how he opened his own Granite and Marble Solutions franchise location in Alpharetta, Georgia in “No (Business) Stone Left Unturned.“
No-H20 Car Cleaning Offers Convenience and Reliability
Who They Are
While Doug Ross could have never predicted a pandemic or recession, he stays positive as a small business owner. He knows his industry is in high demand, even during times of economic turmoil. Americans not only love spending time in their cars — but rely on them for daily commutes. Supply-chain issues affected the automobile market, but people didn’t abandon their everyday, reliable cars. Luxury car spending dropped, but the demand for car services continued.
Ross observed a consistent interest in car cleaning services, emphasizing that even in the recession after the pandemic, people viewed keeping their cars clean as essential. Since launching in June 2022, the family-run franchise business has partnered with stadiums, arenas, malls, golf courses, country clubs, and even GoodYear — all through building their brand of convenient, environmentally-friendly on-site auto-cleaning services.
What They Did
The No-H20 Car Cleaning business focused on offering customers a convenient auto detailing and cleaning service, making them stand out among traditional car wash services and competitors, especially in their local area. The small auto cleaning business details various vehicles and continues to offer a reliable service that thrives in its industry — especially with Doug’s emphasis on building local connections.
While Doug’s sons work on the vehicles, he enjoys taking breaks to network and build relationships with local families and business owners. The Ross family and their business is now well-known in the community, especially because they uniquely offer in-home service on demand. Funnily enough, Ross also knows many of their clients from his former career in finances.
“I knew that cleaning cars was going to be something that would be a big draw and benefit. And had I known we were heading into a recession after the pandemic, for crying out loud? I mean, what a time to start a business. But we haven’t seen a universe of customers pulling back on wanting their cars cleaned. … It’s an important necessity — keeping your car clean.”— Doug Ross, No-H20 Car Cleaning
Join Doug Ross and his five sons in their journey of opening a family-run No-H20 Car Cleaning business in “Working at the (No-H20) Car Wash.“
Top Tips to Inflation-Proofing Your Small Business
The business owners above got more creative in their finances, supply chains, restructured to create multiple income streams, and increased their value with larger portions. Now that you’ve read more about what other small business owners did, here are the top strategies that help most businesses navigate inflation-based challenges:
Ensure your Products are Profitable
Now is the time to do an inventory on your inventory, ensuring all of your products and services are profitable. If two are, and one isn’t, cut that one and focus your efforts on the two that are making money.
Keep Your Finances in Check
This is important anytime, but even more so when every dollar counts. Spend time checking in on your financials often and keep your records up to date so you can see what’s happening in real time. You don’t want the effects of inflation to hit you when you realize that you’ve been losing money for several months — and never noticed. If you don’t already have a business balance sheet, here’s How to Make a Balance Sheet in 5 Steps to get started.
Cut Unnecessary Expenses
Like ensuring your products are profitable, now is also a smart time to cut out unnecessary expenses. Are you paying for a large office space, and you only have two employees? You could certainly find a smaller space and lessen the impact of inflation at the same time.
Get Creative with Business Financing
All the business owners above did. How? By using 401(k) business financing, also known as Rollovers for Business Startups (ROBS). ROBS is rising in popularity as a financing method — and it can be an especially advantageous strategy for those looking to reduce or eliminate debt. Unlike traditional business loans, ROBS lets you invest your 401(k) funds into your business, without needing you to put down assets as collateral (such as your home) or pay high-interest monthly fees. Learn more about how ROBS works here.
Discover more of the best tried-and-true methods of outlasting — and even thriving — during economic downturns in Top 5 Tried and True Strategies for a Recession Proof Business.
Moving Forward and Growing Your Business Dreams
You’ll never be able to predict the future, so it’s hard to know when inflation will recede. That’s why finding a strategy to help you navigate inflation levels is your best bet. There will always be challenges with the economy. For all times, stay quick on your feet and learn to adapt your business to what’s going on in the world. As you can see above, many small business owners are able to modify their businesses to meet the current needs of consumers and offset inflation. You can too!
And if you need help, Guidant always has your back. At Guidant, we offer expert financing solutions and business services specially tailored to small businesses — helping fund and support over 30,000 small businesses across the U.S. since 2003. Let us help you grow or streamline your business today:
Call us today at 425-289-3200 for a free, no-pressure business consultation to get started — or pre-qualify in minutes for business financing now!