Dear Dangerously in Love With Your Finances,
We are a dance and wellness studio that has been in business in Columbus, Ohio, for the past five years. The studio is located in the building that we own. Over the past few months, we have begun to witness increased enrollment. Like many small businesses, our enrollment numbers decreased due to COVID. We are indebted to the goodness of God for allowing us to endure the government shutdown financially due to grants, PPP loans, and our business savings. However, with the rise of inflation, our costs are increasing. How do we keep up with inflation and stay in the black?
~Keeping up with Inflation
Dear Keeping up with Inflation,
First, I wanted to take a minute to tell you how thrilled I am for you and your company that you are seeing an increase in enrollment.
As a dancer and a health and wellness accounting specialist, I know how therapeutic and fun dance can be for the mind, body, and soul. It is a holistic outlet as dance gives me a positive outlook on my physical and mental well-being and allows me to escape from the work day.
But I digress, back to your question. There are a few ways to manage your finances and stay ahead of inflation while simultaneously staying competitive:
- Raise your prices. While it is true that you need to maintain your competitive edge, you also need to ensure that you are making a profit. No business can keep up with rising inflation if they don’t make sure that the scales are balanced, and this is true when it comes to healthcare accounting as well. If your costs are increasing and eating significantly into your income, this must be addressed. We see countless businesses in different industries doing this by raising prices and it has come to be something customers expect in these times.
- Rent out any unused space. Since you own the building your studio is in, you have a great opportunity to take advantage of the space in a new way so it can actively make you money even when you are not hosting classes or events yourself. Consider renting out any hours when your business is closed. This can give you additional income and potentially even get you attention from potential clients who many want to enjoy your services as well.
- Invest in technology. Putting money into technology can assist in increasing your company’s efficiency while bringing some of your overhead expenses under control.
As you consider the steps to take in this time of new enrollment growth and increased inflation, it is more important than ever to fully understand your income and outgoings before making any changes. You must have a handle on your books in order to be able to thoughtfully make any key decisions for business survivability, especially regarding what you need to charge to stay solvent if you do choose to raise your prices.
If you require any further guidance on navigating this phase of your business, please don’t hesitate to contact me.