Navigating inflation in Nigeria: Strategies to ensure business success

Hello, fellow Nigerian business owners.

Have you noticed how things are getting more expensive these days? No thanks to one word that has found itself in various conversations these days: “inflation.”

Inflation is a term we use to describe a general and sustained increase in the prices of goods and services in an economy over a period of time. It’s like a tide that gradually lifts all price tags. When inflation happens, each unit of currency you hold, let’s say a naira, becomes worth less in terms of what it can buy.

Imagine if you used to buy a big plate of your favourite jollof rice for a certain amount, but now that same amount can only get you a smaller portion. That’s kind of how inflation works—your money doesn’t stretch as far.

In Nigeria, prices for goods and services are going up, which can put a squeeze on your business’s profits. Now, while a little inflation is considered normal and even healthy for an economy, rapid or very high inflation, as we have experienced, can cause problems. It might lead to uncertainty in the economy, affect people’s purchasing power, and make long-term planning more difficult.

Economists and policymakers continue to keep a close watch on inflation rates and try to manage them using tools like interest rates, money supply control, and economic policies. They aim for a balance where prices rise at a steady and manageable pace, ensuring stability in the economy and people’s wallets. This hasn’t yielded much fruit in Nigeria; hence, business owners must continue to leverage resources and tools within their control to keep their businesses afloat.

Read also: Nigeria’s oligopolies curb efforts to tame inflation, CBN chief says

Let’s look at some simple tips to help your business stay strong even in the face of rising prices in Nigeria.

Tip 1: Savvy Spending and Bargain Hunting:

Remember how you shop around to find the best deal on your market trips? Your business can do the same. Look for suppliers who offer good-quality materials at reasonable prices. This way, you can keep your costs in check and keep your business running smoothly. Find a way to also share costs with other business owners, where applicable.

Imagine you run a fashion boutique. Try to find local fabric suppliers who offer quality fabrics at competitive prices. This can help you maintain your profit margins while offering great products to your customers.

Tip 2: Adjust Prices Thoughtfully:

Imagine you make and sell delicious puff-puff, but the cost of flour and oil has gone up. You might need to raise the price a little. To make sure your customers understand, you can explain that prices have gone up everywhere and you’re doing your best to keep things affordable.

But remember, don’t raise prices too high all at once. Gradual increases can help your customers adjust without feeling a sudden pinch.

Tip 3: Embrace Creativity and Value-Adding:

Let’s say you have a small electronics store, and higher prices mean fewer people are buying gadgets. Get creative by offering repair services, gadget accessories, or even tech workshops. Adding extra value to your offerings can keep customers coming back, even when budgets are tight. You may even have to consider a new line of business entirely based on what you think people around you need. Selling what people need guarantees a constant flow of revenue and, ultimately, profit.

Read also: FX, inflation hits hard on life insurance NAICOM

Tip 4: Forge Strong Collaborations:

Just like you and your neighbours help each other out, businesses can team up too. Partner with other local businesses for joint promotions or events. By sharing costs and resources, you can reach more customers and create a win-win situation.

Tip 5: Plan and Track

It is not enough to make budgets and forecasts, you must also ensure that you are on track with your plans. Don’t hesitate to make decisions that will help push your business forward, as opposed to making sentimental decisions.

Conclusion:

Inflation might try to put a dent in your business plans, but with a dash of resourcefulness and some savvy moves, you can overcome these challenges. Remember to shop wisely, adjust prices thoughtfully, get creative with your offerings, and team up with fellow businesses. These steps can help your Nigerian business not only survive but also thrive amid rising prices. So, keep that entrepreneurial spirit alive and keep pushing your business forward, Nigerian style!