Let’s talk about inflation.
I can almost hear you sighing, but hear me out…
This article isn’t going to be a total downer. I’m gonna get real about the current situation we’re all facing, but I’m also going to give you solid AND positive advice.
If you’re like anyone else in the United States (or any country in the world, pretty much), I’m guessing you’ve heard a lot about inflation in the last few months — and experienced it firsthand.
In the United States, inflation rose 7.5% in January 2022, which is the highest rate in 40 years. Prices are also rising at the fastest rate since the 1980s.
Things are getting more expensive — food, gas, diapers, appliances — but wages aren’t increasing at the same time.
Good news might seem scarce at this point, but I did promise not to be a total downer.
Here are a few tips and tricks I’ve learned throughout my own entrepreneurial journey:
1. Market your product or service as an inexpensive luxury, or something indispensable to your clients’ daily routines.
When inflation hits, buying power decreases. As a result, people are less likely to spend money on things they don’t really need, or on things that stretch their budgets.
But no matter the economy, people will always spend money on things they like.
The key is to make the case that your product or service is a “necessary luxury.”
You’ve also probably heard the phrase “You’ll always be in high demand” used for certain industries.
You know - anything dealing with health, death, taxes, or hair (sounds like I’m kidding but if you think I’d go through any part of this life without my hairstylist, you’ve got another thing coming…)
So, how can you ensure your business is a necessary luxury and always in high demand?
Well, maybe you’re a copywriting coach, or a financial guru for Black women. A dog walker or a baby whisperer.
Whatever it is that you do, market yourself as a necessary luxury.
Make it clear to your customers and clients that their dreams and needs are still valid, even during financial difficulties.
Whether they’re trying to become a copywriter or get their baby to sleep through the night, those needs won’t go away during inflation.
Your clients, like everyone else, will start cutting out certain expenses from their lives, but make sure they know that what you offer is a necessary luxury - something that they can’t do without, even during difficult times.
2. Lock in long-term agreements with your clients or customers.
If your clients or customers usually pay monthly, offer a long-term contract or subscription for anywhere from 1 year to 18 months.
When offering this contract, you can add a free bonus item to incentivize them to pay upfront.
For example, if they agree to a year-long contract or product subscription, you might offer them one free month of the service you provide or 3 free products.
This is something we do in We Should All Be Millionaires: The Club — we offer both a monthly membership and an annual membership, but the annual membership comes with perks that aren’t included in the monthly membership.
By offering a long term contract, you’re ensuring that you have income for the next 12 to 18 months, rather than hoping your customer chooses to re-sign periodically.
And it gives you time to provide a real, lasting transformation in the lives of your clients — because your product or service can impact them in a month, but it will have a much greater impact over a year or more.
Also, keep in mind that things happen and situations change — your client could lose an important source of income, or have a sudden medical emergency that requires a lot of money. Create a cancellation policy that empowers your clients to feel confident working with you, knowing that they can still back out of their commitment if they really need to.
3. Invest a portion of your business savings.
Inflation, by definition, means that the power of one dollar goes down. What one dollar could buy this year is less than what it could buy three years ago.
When you invest your savings rather than putting them away in a savings account, your return will be better, and your money will gain value rather than lose it.
If you’re at a point where you’re able to save any of your business profits (it doesn’t have to be a lot, especially if you’re just starting out), make the Million Dollar Decision of meeting with a financial advisor and establishing a good investment strategy.
Or you can join We Should All Be Millionaires: The Club, where a squad of business brilliance (including Black women investment experts!) is waiting to lift you up and support you.
Inflation can feel scary,, and for good reason. It has lasting effects on our economy and in our personal lives.
You can breathe easier, however, if you are choosing to invest in yourself through entrepreneurship.
By being nimble, agile, and optimistic (along with making more Million Dollar Decisions), you and your business can weather this financial storm and come through even wealthier than before.
See? There’s some optimism for you (I gotchu, boo).