Learn how to survive and thrive through inflation. In this webinar, we brought together two experts - Helen Russel, CEO of Equator Coffee, and Isabel Guzman, 27th Administrator of the U.S. Small Business Administration (SBA). Helen is deft at managing in a crisis as she helped Equator Coffee survive and thrive during COVID. Today she’s managing a new set of challenges driven by wage inflation, increasing costs, and price conscious consumers. Isabel Guzman is an advocate for small businesses and innovative startups. She brings over 20 years of experience advising entrepreneurs, launching ventures, helping small businesses navigate government, and creating policies and programs to help advance entrepreneurship and innovation.
Watch the webinar:
Here are the key takeaways from this webinar to navigate inflation:
1. Secure funding with the SBA and their lending partners
Funding can help you build a strong balance sheet with enough working capital to ride out these inflationary times. Many small businesses require funding and financing for a variety of needs (inventory, equipment, real estate) but find it challenging because they don’t have a lending network to tap into. The SBA can bridge this gap with the following programs:
- Lender Match Program: This free online tool matches you with potential lenders offering SBA-backed funding.
- 7a loans and 504 loans: These SBA guaranteed loans help you start or expand your business.
2. Lean into your community for resources and support
Your business, employees, suppliers and customers are all essential parts of your community, and we all depend on each other to keep our neighborhoods thriving.
It’s more important than ever as a business owner to get out there and connect. Folks want a memorable experience and their spirits lifted. Helen says, “We see ourselves as an endemic and indigenous piece of our community and our neighborhood to uplift them . . . . Just showing up and connecting, and a kind word and a little sticker on a child means everything in times like this.”
During Covid, many of Helen’s customers and suppliers approached her with recommendations of programs and services to help her business survive. According to Helen, “Building relationships, and leveraging everyone around you is the best way to run a business, and it’s really about community and we’re all in this together. This is why we are successful. We lift people up, and that’s what we are as a brand. [Our customers] will grab us by the hand and take us to the other side because of how we have interacted with them in the community. But you have to put yourself out there and you have to listen for all the tools.”
3. Protect your margins and drive revenue by increasing prices
Raising prices is necessary when costs of goods and operating expenses go up. Helen says the best way to manage your customers’ pricing expectations is to be transparent:
“It’s always frightening to raise prices to your customers, but if you are transparent with your customers they know that prices are going up and your costs are going up. Be transparent, give them the letter. I called our top ten customers personally to let them know we were raising prices and I worked with them and consulted with them how they could raise their prices. It’s truly interactive. They truly are your families, your neighbors. If you are a brand that is extremely transparent, they will take the price increase, because they understand what’s happening. "
4. Diversify your revenue with multiple streams of income
New products or distribution can add multiple streams of income and reduce the risk of being overly dependent on a few core products or channels. It’s like adding another leg to the revenue table to make it more stable.
5. Manage your costs by developing relationship with your suppliers
Strong relationships with your suppliers and distributors along your supply chain matter because it’s all about stakeholder value. Relationships build trust over time, and suppliers are more willing to work with you because they value your connection. Visit your suppliers and get to know them on a personal level.
6. Leverage technology to find new customers and open up new distribution channels
Covid has changed consumer behavior, and the way we interact with customers has evolved with technology. Here are three ways to use technology to grow top line revenue.
- Find new customers through digital marketing and social media. For example, when you claim your Business Page on Nextdoor, you’re automatically connected to hyper-local neighbors who love supporting small businesses.
- During Covid, Helen used a mobile ordering app to find and keep customers, even though it initially conflicted with her high-touch customer philosophy. She quickly learned that technology expanded the reach of her coffee.
- Find new technology to acquire and retain customers. The Small Business Digital Alliance has a digital tool library rich with resources to teach you how to build connectivity with your customers.
7. Partner with the SBA for advising, training and coaching
The SBA and their network of partners offer free or low-cost counseling to help you develop business strategies and lending connections that grows your business. Here are two programs to get you started with the SBA.
- Local Assistance: Find an array of technical centers, financial opportunities, export and trade assistance, and targeted outreach programs for small businesses all over the country
- Community Navigator Pilot Program: Designed for small businesses in underserved communities, this program connects you with states, local governments, SBA resource partners, and other organizations.
Helen partnered with the SBA over 20 years ago, but she still visits the SBA website for the latest tips, advice and programs.
Economic uncertainty is stressful for small businesses, but you don't have to endure this journey alone. Your neighbors are here to support you, and the SBA stands ready with counseling, coaching, tools and lending. The first step to the path of profitability is reaching out to your community.