Inflation Wrecking Your Cash Flow? Boost Business Resilience With Smarter Financial Planning

We talked about HR last week, and that is not a topic I am comfortable with. And just before we got on the air here, Chrissy said she would rather have a colonoscopy than talk about inflation. So guess what we're talking about this week? Inflation. Are you buckled in?

Can't wait.

I think you can.

Yeah, I can.

I think you. I don't think you guys should wait, though. So we'll. We'll be right back. She's the CEO.

He's the marketing and operations guy.

If it's broken, you need the business fix. So what's coming up that you're excited about? There's gotta be something going on.

There's lots of things going on, but I would say right now it'll be passed when the episode comes, but. So Goodwill Industries of Akron.

Yes.

They have a mobile donation trailer. Did you know that? And you can schedule it. You can have it dropped at your house, you can have it dropped at your business. So we have it at AUI and Clarity right now, and it is collecting donations. And we have cleaned out a lot of the other things in the office that we just don't need anymore. And, you know, when you have a family business, oftentimes it becomes a second place of storage. Not for my stuff, but for like my parents stuff from decades ago. So. And like my late grandmother's stuff that was from her house. I'm like, why. Why are there pots and pans in this storage locker? So as we again, having to clean up because the building got run into. We now have the donation trailer. So Goodwill of Akron, you should look into the donation trailer, scheduling it. You can have it for a week, fill it all up.

That's awesome.

It is.

That's very cool. And by the way, is the building pretty well fixed now?

No, we haven't started even. No, no, I told you. November. It'll be done in November.

Which November.

Probably next November, the rate we're going to. Let's go from there, Josh, what's coming up that you're excited about?

We've got a couple of cool. We just brought on a new podcast host. We've got another one that we're in talks with. The one they work in the medical field, another one works in cyber security. So I'm pretty excited to listen to what they have going on and to. I mean, it's one of the things I love about the podcasting industry. We get to. I mean, I get to hear all these cool things and yeah, these are pretty cool ones. And unbelievably well spoken individuals, too. So. Yeah.

So you won't be tortured while you're editing.

Correct.

That's nice.

Correct. It's not like when I have to edit myself.

Yeah, I'm sure that's so much fun. I'm just happy I don't have to edit.

No, no, no. And I'm grateful we have Nika to edit. Yeah, she's. Yeah.

Wonderful.

Hooray for Nika.

Yes.

She does a good job. As we mentioned in the beginning of the show, uncomfortably for Chrissy, we are talking about inflation. It's looming. We just got out of some. There's some things that we see that could be up ahead that I don't want to say. This is not a guarantee.

No.

This is something, though, that we should always be looking at and kind of buckled up for. Have a plan. Like last week's episode where we talked about hr, you kind of need to build the ark before it starts to rain.

Absolutely.

Same thing for this. What's interesting is the budget lab at Yale estimated the average U.S. tariff rate on all imports has jumped from 2.5 to 18%, highest it's been since 1933. It's not just a tax. It's. It's a shift in how we have to look at things, especially if you get items. If you don't get items, you're still going to be dealing with some of this. If you're in the services side of things, you're still going to be dealing with some of this because some of the people that you work with may be getting items, your clients, things of that nature. So there is a couple of numbers under, under half. 48% of small businesses still name inflation as a concern. This was in the Q2 quarterly spotlight pull published by the US Chamber of Commerce. So we realize that's one of the reasons why I wanted to address this, much to your dismay.

That's okay.

60% of small businesses have been forced to increase their own prices over the past year. Now, I. We know inflation has come down, the rate of inflation has come down, but it's something that, like I said, it wouldn't take much for that, that fire to reignite.

Yeah.

U.S. manufacturers have seen input costs like steel surge as much as 12 to 15% in a month. I don't know about you, but if all of the people we work with said, hey, we need 12 to 15% more next month, I would probably start crying in my closet hiding underneath a mattress.

Yeah, it's a lot of increase in output costs. It's not Yeah, I told you. I would much rather talk about anything else but inflation, but it's necessary, so something. You've got to be prepared for it. It's just one of those where it's like, this is just hard.

The fact that you deal with HR and you would rather not. You would rather not talk about inflation. To me, that's. That. That is a. That is a bold, bold statement.

Well, I think you have to remember, I mean, my, My experience is insurance and hr, so we deal with a lot of inflationary costs on the insurance side. So that's difficult. You know, you want to talk about never. I mean, again. I mean, hate. I love hate mail. I'm gonna get it from the doctors. They can raise their prices and they just don't care. So you gotta deal with that inflationary cost. You deal with insurance negotiation. But the other part is, you know, Josh, I, I managed a company that was in receivership, so another organization that was in Texas. And so when we talk about inflation, we talk about tariffs, we talk about all the different, like the fluctuation of a commodity cost and dealing with the energy sector, which was what I was in. I think that's it. I get some more of that. Like, I can deal with it. I just don't like. Like to talk about it. It's not my favorite, which is okay, but we're going to talk about it.

It's like you're turning into a guy.

Yes, we.

We deal with things. We don't talk about them necessarily, and we'll just. We'll just pretend that they don't exist. Yeah, tariffs can directly jack up costs. I mean, and when we think of inflation, too, we think of, be it the. Just the devaluation of the dollar. The dollar has had its worst year at this point since I believe it was 72.

Yeah, it's been a while.

So 40, 50 years. There's a lot of people that are scared to raise prices. And I fully understand that because when you go to everyone, everyone's like, I'm already strapped. Now, granted, I don't think I've ever talked to anyone where they're like, they weren't strapped. Everyone wants more. I get it.

Correct. And they want you to do. And you need to do more with less and you need to figure out how to be more efficient.

Right.

So. Yep.

One of the reasons why I wanted to cover this. We both listen to the. The same podcast. And one thing that I find that's interesting is over the past 20 years, we have not dealt with, oh, when it comes to a lot of things economic.

Yeah.

Especially with, I mean, if you look at the Great Recession, okay, that, that was 15 years ago. Well, 16, 17 years ago. So we're coming up on 20th anniversary here of that. So most business owners have not dealt with. Oh, and this to me is something that could be an oh. What should people be looking at? What's some of the mistakes that, like, if we look at inflation, what's a mistake? What's the solution that can help? Like an ounce of solution is worth a. What is it? Ounce of prevention's worth a pound of solution, pound of cure, pound of something like that. Yes.

That ounce of prevention is worth a pound of cure. Yes.

You're gonna have the better sayings than I am. This episode.

I'm gonna try.

So what should we be looking at with that?

I think part of it is paralysis. So one of the biggest mistakes you can make in dealing with inflation is paralysis. So too many leaders hope that it's all gonna blow over the current economic climate that we are in at this point in time. It's a climate, it's not a storm, it's not going away. I think it's important that we think about, you know, how do we position ourselves for the future not to get so bogged down into what's going on today that we forget that we need to plan for two, five, ten years from now. So it's like, don't just live in paralysis and go, I'm just going to wait for it all to pass. You've got to make decisions. The second one I would say, and I think this can be you too, from a operation standpoint. You go into cost cutting mode.

I see it all the time.

Second mistake, going to full cost cutting mode. You can't shrink your way to greatness. You can't. Instead of asking, where can I cut? Kind of ask, where can I create more value? Now here's what I will say. If you have never done an efficiency study or you've never worked within your organization and itemized and actually analyzed your expenses, then you may actually be able to cut yourself a little ways to greatness. Sure, if you've never done it, but if you are constantly, or it is something that you pay attention to frequently, I think it's not possible. Like, I know in our organization we cannot cut our way to greatness. We can, because we run pretty lean as is. We have some. We have inflationary inflation built into some of the things that we do. We have increased our prices in the last year in Part because you're dealing with the swings of labor, but then also those service businesses that don't think anything that they do is impacted by inflation. You're in denial because like, do you pay for energy? Do you pay for electricity? Do you have your gas prices? Are you paying for fuel? Do you have corporate cars? Like, there's so many different things within your organization that you're, you're dealing with the same thing with inflationary costs around people.

I was just going to say the, the other thing is too, is if you don't think inflation affects you and you have any employees at all, those employees, the inflation is going to affect them.

Yes.

I eat six eggs for breakfast every day. Everyone was talking about the price of eggs.

You were dying.

When I am paying for $5 for breakfast that I have to make at home. Yeah, yeah. And I mean your employees feel that.

They do.

Yeah. I love the, the, the cost cutting mode. You can't cut your way to greatness. We can all trim down a little bit.

Absolutely.

But in the same sense, you still need some fat to survive.

You do.

If you don't have some fat there. If you go without, with a meal, without a meal for a day, you're done.

Yeah.

You be done like now. Yeah. No, and it's. I love how you said that. Can I create more value? That is that it's finding ways to treat your clients better, to work with customers better, to straight. And once again, the thing that I like about some of the cost cutting stuff is if you look at that from an operational efficiency standpoint, you may not necessarily find these big cost cutting things, but you can find some efficiency things.

Yes, absolutely.

And those can be a big benefit to both you and your customers.

Yes.

Now the flip side of that is what I've seen a lot of operations managers do is they push that efficiency thing to the point of Amazon where you can't pee.

That's a problem.

That is a problem.

Especially with hr. It's not just a right.

See, we brought it back to HR again.

That'S a public health problem too.

But they push that efficiency to such a deuce degree that now. And what's so funny about it, they look at these KPIs of saying, well, we can push for this much more efficiency. There becomes that first off, that the point of. Point of diminishing returns.

Correct.

Where if you get someone 10% more efficient, they're probably going to be 50% more likely to leave.

Yes.

And then where are you? So that is another piece of that that I like I said to look at your efficiencies in that is good. But to cost cut is, yeah, just like, hey, we're going to switch cable providers because we can save $4 a month.

Yeah. Or we need to reduce our expenses by 25%. I'm not going to tell you what to cut, but you just got to do it, figure it out. That went from an upper management going to middle management. That can be just. It can wreak havoc in an organization. So if you're going to pick a number in a leadership role, know what number you're going to pick and why, and give some examples as to how they can potentially eliminate costs without. Well, I've got to have a 25% reduction in costs. Okay. I'm gonna get rid of 25% of my workforce. That's when you really have to start thinking about, from an inflationary standpoint, what are you doing to your organization and are you harming it more? Because the time to prepare for, I mean, the time to prepare for inflation is any time, but really it's, do you have your lines of credit? Do you have your financial principles solid before you start dealing with some of these ups and downs? The other part, I would say there's an amazing opportunity in dealing with some of these financial issues, financial pressures that we're getting to innovate. So think about, you know, what can I repackage? What can I do differently? Can I offer a premium version of something? Can I bundle it or not? Even on the product side, what can I innovate within my organization? What technology can we leverage? What systems can we look at or look at things differently? What have we done in the past? If we take it all apart, how can we put it back together again so that it's more efficient, but then it's also better than it was before?

I don't know how many marketing studies have been done on products where they took and swapped out a cheaper ingredient or a cheaper item. And they said all new.

Yeah.

They didn't say all better. No, they said all new.

Brand new.

Right. Brand new. New and improved. Well, that improvement could have been for their bottom line.

Yeah.

And as long as they get now, once again, those are kind of shifty business practices. But what I see in this is if you take that chance to say, look, we're going to change our packaging, we can do a less expensive packaging that is just as good. It may not look as good, but that's an opportunity then to go to your customers and say, hey, we're doing this for you in order to keep your, in order to keep costs down, in order to change this. If the packaging really means that much to you, well, then we'll do it. But it's going to cost you an extra couple of bucks.

Oh yeah. Being transparent with your customers is really important. I will say too, on the B2B side, if you work with other business owners, ask them, hey, what are you doing to combat inflation? If they're like, I'm hiding under my bed, that's not the person you're going to ask moving forward. But if they say like, hey, this is, we're, we're addressing it through, through this measure. We've, we've moved some of our money into money market so that we can retain more. We, we've put more money in investments. We're looking at like, it's not just even on. You can talk about the personal side and what the business owner does with their portfolio, but then also, how are you dealing with cost cutting measures within your organization? How are you dealing with inflation? Some of them may say, I don't know. And if they say I don't know, for me that's an opportunity to talk about fractional hr. I'm like, well, we can talk about how we can optimize, potentially save you some money and then help you find some efficiency. So it's, I think, and the same thing for you on the marketing side. It's like, hey, how are you using your dollars? How can you be efficient with your content?

It's funny. The other thing is when you talk about this, one of the things that we haven't talked about so far is, is the numbers. So many people don't know their numbers.

It's. I would say it's more than half. If we're going to pick statistics, I can manufacture one and say that more than half of business owners don't understand what their numbers mean.

Yeah, they're. I mean, I, your numbers should not like your, your financial statement for this month should not be yes or no.

It'S green or red. It's green.

We're good, right? Do we have money? Yes or no? That should not be your financial. To me, one of the things when it comes to dealing with inflation is like, what can you afford? Can you take a 4% hit? Yeah, sure, if you can. Awesome. But once again, the marketer in me is going to be like, hey, you got to tell your customers, hey, we're dealing with this so you don't have to.

Yeah.

Ta da. We are so helping you guys Out. Look at us.

Yeah. Be transparent and say, look, we may not raise our prices this year. We're going to lock in your pricing for 12 months, but in 12 months we're going to have to revisit it. I think that's, it's very reasonable to say that.

The other thing is, is now is a beautiful time to go back and look at your supply chain. Who are you getting? What, from where?

Yeah, from where ideally, especially if you're manufacturing, what countries are they coming? Are they coming on boats? Are they coming on trains? Are they coming? Yeah. How are things coming?

Right. I mean that can be huge. Because the other thing is this is something that so many people don't spend the time to look at is there's opportunities out there for you to like, let's say, I mean I have a trucking background. Let's say you've got parts for semi trucks. There may be another manufacturer out there that has a very high quality part at a great value pricing that you just haven't looked at because you've never taken the time to do that supply chain audit in the same thing about that is too is what I would say is don't put all your egg in one basket. So many people have just one supplier for everything.

Yeah.

What happens if that supplier has an issue? Ouch. I still remember I, I had just started at Summit Racing Equipment right out, right out of college, UPS went on strike. Summit Racing Equipment is a mail order business.

Yeah.

They did not ship with anyone else but UPS. Oh, right. FedEx said we can ship seven packages a day for you. Summit said we ship seven packages a minute. They're like, great, you're done at 8:01 in the morning. And it's because I get it from the logistics and operations.

Yeah. They can't do it.

They can't, we can't, they can't handle anymore. So yeah, all of their eggs were in one basket. And son of a gun, if right after the strike they did not start using FedEx a little bit more.

Yeah.

So if you can have those multiple outlets so that way you can look at those different things. The other one that I always tell people too is when you do that audit, ask about like bulk orders.

Yeah.

You may like in some cases it is cheaper to order bulk and pay the interest on that bulk than it is to order on demand.

Yes.

Do that math. This is where once again, you've got to look at those numbers.

Yeah. And I think it's okay to ask your suppliers right now as you're Starting to deal with bulk orders. When was the last time you had a price increase? Or go back and look on your invoices? When was the last time? If they're raising their prices because of volatility, every 60 to 90 days, and you know what you need for 120 or 365. And you know exactly what you said. It's. It's. How can you even do some of the reverse engineering and kind of look at the back math? Because I guarantee you, oftentimes the salespeople don't know if you're working with a salesperson. They're not always going to know. They just know this is what's in the system. So this is the quote I'm sending you. And they may not know that there was a significant price increase. So you've got to do some of that homework.

They also may have conveniently forgotten.

I would conveniently forget if I was raising my price 40%. I'm not, but I would. I've dealt with that in the past. It happens sometimes, especially with software. I will say this. If you're on a subscription for specific types of software, there have been significant increases that you may or may not be able to renegotiate. And so it's really important that you pay attention. Another one, I will say, as someone who deals with a commercial building, is Dumpster. They're like, we're going to charge you an additional 40% for your dumpster. I'm like, it's the same effing dumpster. What are you talking about? Well, it takes us longer to do this, and we have to do this. And, like, I'm willing to pay 20% more. I'm not paying 40% more. I'm going to get a quote from three other people. And they're like, wait, you can keep the same price? I'm like, exactly. Thank you, Dumpster company. You will be unnamed. Starts with an R.

That to me is. I mean, go through the bills.

Yes.

Look for those things. Look for the. I mean, look at your energy bills. Look at the. I still walk into businesses where I'm seeing, like, old incandescent and fluorescent lighting. And I'm like, look, people, come on.

You're getting them from somebody, some guy who's like, stockpiled them in their basement like that. Don't. It's time to move on. Upgrade. If you upgrade some of those things, that'll save you over time. Some of them, you may be able to get a tax break on. It just kind of depends. I will say, too with energy prices, pay attention because they're not as high as I think. A lot of times people think, well, gas prices are really high. I'm like, they're higher right now, but they're still lower than they have been. So you've got to kind of pay attention to where things are in space. And I will say this on the energy side, as someone who worked in energy for a hot minute, it's not as up as people say it is. It's not.

No, it's not, it's not.

And so when people, energy prices are causing like, no, they're not. They're actually pulling it down. So.

Yeah, well that when I show up at the gas pump, everyone's always going to complain about gas prices. I remember being 16 and when people like, oh my God, gas is expensive. And it was, it went to $0.89 a gallon. Yeah, yeah. I still remember people complaining about it back then. I get it. It's not that expensive right now. Something else I want to touch on is look at your product mix and what is and what isn't making money.

Yeah.

So many people. Once again, this, this is this audit stuff that people just don't do enough of. They're like, oh, we sell, we sell widgets. Well, if widget a makes you 30%, widget B makes you 5% and inflation is going to suck up 5% of that. Guess what? Widget B no longer makes sense to make.

Exactly.

People need to be aware of that and look at those types of things. To me it is just a huge, huge piece of that. Too many people try and sell on cost on that price.

Yep.

When you look at the pricing of stuff, I'm assuming you're looking at the cost.

Yeah.

But are you looking at the value for the customer?

Absolutely. I think especially in a service based business, that's what you have to do. So it's a little bit different when you've got a different type of cost of goods. Gold. But for me it's especially when you're dealing with. Because we're B2B and we're small business, there's got to be a significant amount of upside or value for the. Why you're, you're writing a check for thousands of dollars. You got to think about it.

Yeah. Where, where does that return investment?

Exactly. What am I getting? And then not just what am I getting but then in addition, what, what is the additional value? Like I know I'm getting X. Can I also get Y? So you've got to think as a, as a Business owner or someone who's, who's figuring out how to battle inflation. Especially in, in a service based business that, I mean insurance isn't as optional, but HR can be optional because you know, people think Google and ChatGPT are going to save them money. They don't. They will cost you money in the long run. But that's fine. You can, you can be wrong. Call me when you want to be right. Call clarity, please. But it's really thinking about, you know, what is the, what is the right thing long term. So don't. Do not miss. I'm going to have short term gain and then I'm gonna have long term pain. Like don't. You don't want that. You want it to be backwards.

I asked a friend of mine about something and he says he does role playing with the sales team.

Yes. That's a great one.

And it's so funny because I cannot do it.

No.

Well, like if I am the customer. Did you ever watch the Office?

Yes.

Remember that scene where Jim was Mr. Buttlicker?

Yes.

I turn into Jim. I am not a good role play guy because I turn into an absolute jerk.

That's okay. I think it's okay for your sales team to have to deal with that type of personality. Not all the time, but the questions, I think it's a really great, like it gives them perspective too and it enables you to kind of see what your, your employees doing, what your sales team's doing. So you, I mean even if just be yourself, maybe not. Correct.

It has not always served me well.

But I think it's helpful. I think it could be really helpful.

It 100% and I get it. And it's funny because from like when it came to the sales side of things when I, when I did some sales stuff, I was the technical guy. I was not the conversationalist. Imagine that.

Okay.

Right. The, the, the. There was always one or two salesmen that would come in, hey, how's one? And I am not that guy.

Yeah.

As soon as they had technical questions about the product, I was the guy.

Yeah. Well, I think it's okay too to flip the perspective of you be the salesperson and then you let the salesperson on your team be the business owner because they may be able to share like these are the things that they've been having issues with. And so I think it gives you the ability as someone who built the business, who loves the organization and probably, I mean theoretically you may know more about the nature and the psyche of a business owner. You can help with the sales process when you're the salesperson. So I would say reverse role play, too. It's really important.

That makes sense. That makes sense. I'm still probably going to be terrible. I cannot act to save my life.

You don't need to act. You just have to talk. It's not acting.

I'm okay at that.

I guess.

Another thing that we have here is like a point, is what isn't changing? The quality, the service, the commitment. That to me is a big thing. So the price may be changing.

Yes.

We're going to make sure that you're still getting a value for that through our quality, through our service, through our commitment to making sure. I mean, for us, like I always say, success is a shared thing, is a core value of ours. And I want to make sure that people feel that, that they are getting that value with that. And that's not going to change no matter what the price is.

It's not. And I think oftentimes, I think as business owners, when we are running through the. I don't want to raise prices or I don't want to have. Everybody has to deal with it. It's like everybody's dealing with inflation. So having that transparent conversation and then, of course, emphasizing what isn't changing, I think can be really important. But you've got to have that mindset of, you know, it's not just you. Everybody is dealing with this. It's like when we dealt with the C word in Covid, like, everybody was dealing with it. It wasn't like you were the only person in your basement. It was. No, everybody.

To me. The other thing that I look at with this is if, as we start to look at these audits and the numbers and, like, the preparation that you talk about is the paralysis.

Yeah.

Acting early to me is a key in this is one of the things that I'm taking away from this. Because if you start to get ahead of this, you now have the advantage over so many other people that are just like, oh, crap, I just got a bill for my steel and it is 15% higher.

Yes.

If you're out in front of that and prepared for that. It's. It's once again, it's building the ark before the flood.

You're exactly right. And that's really the role of a CEO. You're supposed to be the person running ahead, thinking about these things. You should be six to 12 months ahead of where you think the economy is going to be. So we lived in paranoia world, Josh. Like 12 months ago, all my people were like, what's going on? What is she doing? And now things are okay. I mean, we're like. And so when people are like, how are you navigating this? I'm like, I've been paranoid about this for like the last two years. This is nothing. Like, I'm. We're. We're ready. I think that's part of it too, is like kind of. You've got to keep your head up. Don't put your head in the sand. It's really easy to bury yourself in operations when you don't want to deal with something. And this is something. Again, don't procrastinate. It's important to kind of be forward thinking in this space.

I love that. So to. From my perspective, three actionable steps. Analyze your exposure, supply chain, all that other stuff. I mean, how, like, if we start to get. If we start to see that inflation ramp up, how big of a club is that? How big of a threat is it to you? Is it a guy with a baseball bat 10 blocks away or is he standing right next to you with a baseball bat? That's the thing that we need to look at. Strengthen your pricing power. Strengthen your pricing power. Don't just. Not just raise prices. Focus on what makes it so you can justify that. Be proactive in your communication. And once again, the other thing is control what you can.

Yeah.

I know a lot of business owners that spend a lot of time worrying about stuff that they have zero control over and no, focus on what you can. And then the other thing is, one of our first episodes was about cash flow.

Yeah.

Have more than both dollars in the bank.

Yes. And a line of credit.

I was about to say credit cards have the lines of credit. Like, now is the time to go ask for that line of credit. If you had a decent month, go ask for that line of credit. Get that credit card. I mean, I know you were heavily involved, I believe, in your business back in 2008. Correct.

Yes. I was. Not our first economic downturn or challenge. I mean, 2008, 2013, we had. Yeah. Lots of them.

Right. What are some of your steps of surviving that besides buckle up?

Buckle up, buttercup. I will say I got three steps, but before I start with my three steps, I want to say the other. Like, when you know your line of credit, pull your numbers together. We have this much left in the line of credit. We have this much left in margin on credit cards. When you see that number, it's like, oh, this is okay. And then we've got this much in savings. I think it's really important you can delineate. Okay. We've got $300,000 in an untapped line of credit. We have about $160,000 in credit card open. Like we don't even pay them off every month. Okay. So. And then we've got about $200,000 in cash on hand reserve. So it's like, oh my gosh, I can survive for a really long time. I don't have to worry. So it's really. I think that's it. But. Okay. Three steps to leading through economic pressure. I would say this. First, embrace reality. I hate the words new normal. So we just say this is normal. Okay. This is what it is. Denial costs you twice, so just don't do it. So that's first, embrace reality. Second is shift from defense to offense. So where can we create more value and not just cut costs? And that third is over. Communicate. So loop in your team, loop in your customers. Transparency builds trust with everyone. And I think as you continue to communicate, it'll help you sleep better at night. You lean into that pressure and then it just becomes just another day. So economic pressure for me, it's challenging, but there's times where I go, it's just. It's Tuesday. It's okay. No different Tuesday.

It's Tuesday. Today's Monday. When we're recording this.

Yeah.

Okay.

Tomorrow will be Tuesday.

It will be. It will be. At least I hope it will be. Otherwise, we've got other problems besides our business besides raising prices.

Yeah.

Give me something creative non price. That a service business like yours or like mine.

Yeah.

We can do to help protect and preserve our margins. As we know, there's the distinct possibility that those around us will start doing other things.

Yeah. It's just common sense. It's adv. It's add value. So you know, that might mean offering an exclusive package. You add. Adding different conveniences for your. For your customers. Creating a VIP tour tier. VIP tier? Yeah.

Oh, yeah.

Yeah. There's different things. Like instead of having one price point, have three. And then you know the psychology, you'll move to the middle tier. So it's like how do we price things correctly but offer more value? I think you can always add value.

Yeah. It's funny how many like you do the top and bottom line.

Yeah.

As those will be 10% of your customers.

Correct.

Other 90% is going to go right in the middle.

Here's where I want them. All right, you ready?

Yep.

What's the single most Important financial metric a business owner should be watching on a weekly basis during high inflation.

To me, it's the input costs. What I mean, if, if you're buying things, if you have to buy things to survive, that, I mean, because, I mean that is your, that's your profit, that's your margin. That is the money that you are using to survive.

Yeah.

If that number, that input cost number changes, you have to do that math that day. Can we survive this? Does this, does this still make sense? Because there's that big question is, does this make money? I still remember one of the first things they said when it was the first like hour, when within 10,000 small businesses, they said, if what you're doing is not making money, doing more of it is not going to be better.

That's correct.

And so you have to realize if what you're doing is making money, there are services we've offered where, when I look at the time involved, I'm like, oh, that's like a zero margin item.

Yeah, we're not going to do that anymore. Right.

And if, if that input cost changed at all suddenly, I would be offering a service that was negative dollars and that most businesses don't do well offering negative dollar services.

No, not for long. I will say though, if you've been in business long enough, you've been through some economic cycles, there are going to be times where you have a down year. 100% down year does not mean, oh my gosh, I am a horrible human being, I need to quit now. Sell everything. Most if, if an organization is financially solid, it can sustain two down years in a row. Don't recommend it, but like, you can, you can do it. And so that's what I would say too is like, just give yourself perspective. And you know, occasionally we're going to have a down year, we're going to have inflation costs, we're going to have different things happen. You can have, I mean, lots of things can happen in your organization. You lose a key salesperson, someone, someone passes away unexpectedly and now you've got a hole within your organization you've got to fill. So, I mean, down years happen. That's, that's not what we're talking about here. We're talking about how to be prepared for, to keep yourself not in a down year if you can help it.

To me, it's looking for the opportunity in that.

Yeah.

And this, once again is that opportunity to look at and audit those things and see what you need to do to make your business better. Because worst case, scenario, if we don't get copious amounts of inflation, even if we get just a little inflation, maybe we get deflation. Yeah, you're still set up better than you were. I mean, that is the absolute worst case scenario.

Exactly.

Looked at your business and you, you're set up better than you were beforehand.

You can be mad about all the work that you did to make your business healthy. That's fine. That's fine.

That being said, I feel like that's a good way to end now that we've done the full colonoscopy of our business survived. You knew I was going to bring back 180 degrees. Thank you for tuning in, Chrissy. Thanks again for the practical advice is what you're so good at. With that, we've got more resources. You can find all the episodes at business fix podcast.com make sure you follow us on all the social medias at the Business Fix a review and a subscription go a very long way into helping us reach and help more business owners. Next week we're going to talk about something that comes up I a couple of I I I believe this is an interesting topic that some people have heard about our artificial intelligence.

Never heard of it, no idea what you're talking about.

How to use it, why you should use it, where you should use it, where you shouldn't use it.

Please.

This feels like another HR conversation. That being said, do me a favor, take care of yourself. If you can, take care of someone else too, we will see you very soon. Sam.