Inflation has slowed significantly since June of 2022, when inflation hit a 40-year high in the U.S. According to the US Bureau of Labor Statistics (BLS), the average annual inflation rate is down from 8.0% in 2022 to 4.1% in 2023, with 3.0% expected in 2024.

Though inflation is trending down, consumers and businesses may still be feeling the effects of increased prices, especially in areas of food, energy and property.

Actions for Curbing Inflation’s Impact on Business

If your franchise business is feeling the lasting impacts of inflation, a proactive approach can help. Consider these tips:

Stock up on supplies—If prices for your core materials continue to rise with each order, consider stocking up now. Look into renegotiating contracts with your suppliers and check that all your supply orders are being used. You may also consider substituting products or trying out a different brand.

Examine business expenses—Cutting back on nonessentials and looking for more ways to reduce your other costs can help. Save on gas, reduce vendor deliveries and examine your payroll.

Focus on growth—To stay ahead of inflation, make moves to grow your business. Increase your marketing, revisit your pricing strategy and invest in your business to improve productivity and reduce overhead costs.

Raise prices—While raising prices isn’t ideal, doing so strategically can help you combat inflation while keeping customers satisfied. Avoid dramatic across-the-board price increases. Raise prices slowly in modest increments and choose areas where customers are less likely to notice.

Get employee feedback—Your employees will have a different vantage point to your business and its expenses. Ask for their insight into where more money can be saved.

Update your business insurance—Coverage helps protect your organization in the case of accidents, injuries and other losses. Keeping your policy up to date during inflationary cycles is particularly important, as inflation can cause changes in property values, debt ratios and liability exposures.

Protecting Your Franchise Business

Whether from inflation or general claims, Lockton Affinity has tailored insurance solutions to fit your business needs.

To learn more about options for your franchise insurance, contact our dedicated insurance representatives today.