Price inflation is a reality that businesses in Malaysia need to contend with, especially with the country’s current economic climate. It is the general increase in prices of goods and services over time, caused by various factors such as supply chain disruptions, higher transportation costs, and currency depreciation. Coping with price inflation can be challenging, but there are ways to manage it without compromising the quality of products and services.
Diversify with local suppliers
One effective strategy for businesses to cope with price inflation is to both negotiate better deals with local suppliers and diversify their product offerings with locally-sourced supplies. By negotiating better deals with local suppliers, you can reduce the impact of increased costs of raw materials caused by price inflation. Maintaining good relationships with local suppliers is also important as this can lead to more favourable terms and conditions.
Diversifying product offerings with locally-sourced supplies and ingredients can also help businesses spread the risk of price inflation affecting different products and services differently. By sourcing locally, you can contribute to the growth of the local economy and support local farmers and producers. This can also lead to a positive image for the business as customers are becoming more aware of the importance of supporting local businesses and communities.
Combining these strategies can help you effectively manage price inflation and its impact on your operations. It can also contribute to the growth of the local economy and support local communities, which can have positive long-term effects on your business.
Cost management and price review
This is also critical in coping with price inflation. Businesses need to monitor their costs closely, identify areas where they can reduce costs, and implement cost-cutting measures. This can include reducing energy costs, reducing waste, and implementing more efficient inventory management systems. You can also consider outsourcing specific tasks to reduce labour costs or simply automate them with available tools online if you can!
Another way to do this is to review pricing strategies regularly. Price inflation can make it challenging to maintain margins, but you can adjust pricing strategies to reflect changing market conditions. Pricing strategies should be reviewed regularly to ensure that they are still competitive and profitable.
Focus on customer satisfaction
You’ll know when a customer is happy when they come back to do more business. One good way to encourage this is by launching a loyalty programme. By offering rewards and discounts to loyal customers, you can create a sense of appreciation and incentivize customers to continue to support your business.
Launching a loyalty programme can also provide valuable data and insights into customer behaviour and preferences. This information can be used to tailor marketing efforts and improve customer experiences, which can lead to increased sales and customer satisfaction.
To launch a successful loyalty programme, you should consider the needs and preferences of your customers. The programme should be easy to understand and use, with rewards that are meaningful and attainable. Regular communication with customers about the programme and its benefits is also important to keep customers engaged and aware of the rewards they can earn.
By focusing on customer satisfaction through initiatives such as launching a loyalty programme, you can build strong relationships with your customers, boost your sales, and indirectly weather the effects of price inflation. Customers who feel valued and appreciated are more likely to continue to support the business, even in the face of rising costs.
Look into your tax relief options
The Malaysian government has implemented various tax relief options for businesses, including small and medium-sized enterprises (SMEs), to help them cope with economic challenges such as inflation.
One tax relief option available to Malaysian businesses is the Special Tax Deduction for Automation Equipment. This tax relief allows businesses to claim up to a 200% tax deduction on qualifying expenditures for the purchase of automation equipment. This can help businesses reduce their costs and improve their efficiency, which can help mitigate the impact of inflation.
Another tax relief option for Malaysian businesses is the Accelerated Capital Allowance for Automation Equipment. This tax relief allows businesses to claim up to 20% capital allowance in the first year for the purchase of automation equipment. This can help businesses reduce their tax liability and free up cash flow, which can be used to invest in other areas of the business to cope with inflation.
Additionally, the Malaysian government has implemented various measures to support SMEs, which make up a significant portion of the country’s businesses. These measures include a reduced corporate tax rate of 17% for SMEs with a taxable income of up to RM500,000, as well as various grants and incentives to help SMEs improve their productivity and competitiveness.
Improve efficiency with the help of technology
One effective strategy to cope with price inflation is to improve operational efficiency. Inflation can lead to increased costs in various areas of the business, but you can mitigate these costs by improving their operational efficiency. This can be achieved by reducing waste, optimizing processes, and automating repetitive tasks. Automation, in particular, can help you save time and money by reducing the need for manual labour, increasing productivity, and improving accuracy.
You can also benefit from a cloud-based POS system like StoreHub to improve efficiency. StoreHub is a cloud-based POS system that can help you manage inventory more efficiently, track sales, and monitor expenses. With StoreHub, you can also automate tasks such as invoicing and purchase orders, which can help you save time and money.
StoreHub is also scalable, which means that it can grow with the business. By using StoreHub, you can improve their operational efficiency, reduce costs, and improve profitability.
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