Practical steps for RDS owners who are feeling the stress of inflation.
No one is immune to the effects of inflation. Financial markets are shifting, spending habits are changing, and the future can feel a little shaky. And yet, according to Nation’s Restaurant News, delivery is here to stay.
Of course, that doesn’t mean your RDS can simply stay the course and make no adjustments to account for inflation. Virtually every industry is adapting in some way. But there are steps you can take to protect your RDS from the worst of it.
Raise your prices.
When inflation rates are up, everything is more expensive for everyone—including businesses. Some companies may slash everything they can to keep prices steady. But others will add surcharges or simply raise their rates to reflect the changes. Most consumers are aware of this reality.
This is an option for you. Of course, you need to be smart about it. If you’re too aggressive about price hikes, you’re likely to upset—and lose—customers.
But there’s one strategy that can dramatically ease the pain of a price increase: Transparency. Major industry leaders seem to agree that honest communication with customers can make a big difference. If people understand why you’re increasing prices, they’re less likely to refuse your services over it.
In simple terms: Don’t be afraid to raise your prices if that’s what you need to do. But be smart about it, and be proactive about educating your customers on the reasons why.
Don’t spread yourself too thin. Focus on your core earners.
Many entrepreneurs love the thrill and challenge of constantly exploring new ideas for services and revenue generators. The risk, however, is that these new ventures cost money. Plus, if there’s no core customer base yet, revenue may be middling.
In times of inflation, it may be best to hit “pause” on your side projects and focus on big earners. This might mean limiting your geographical range to the few key areas that generate the most revenue. This might mean stepping back from speciality deliveries, like flowers or non-food items.
It’s okay to be a little sad about taking a break from your passion projects. Inflationary periods don’t last forever, and you’ll probably have a chance to get back to that creative outlet. So be honest with yourself about where you can cut back, and direct that energy toward your most valuable offerings. Your ideas aren’t going anywhere.
Focus on selling value.
As you may recall, we’ve talked about value before. Here’s the philosophy in a nutshell: Purchases aren’t just about dollars and cents. Some benefits and outcomes simply can’t be quantified. If opting for delivery over pickup gives a busy parent an extra hour to hang out with their kids, that’s priceless.
In other words, don’t assume that saving a dollar here and there is the only thing that motivates your customers. They want new culinary experiences and memorable moments with their family. If someone in the family has a compromised immune system, they want a safe dining experience.
Focus on that value in your messaging, rather than promoting the same sales over and over. It’s a powerful way to put your customers in a different mindset. They’re not just thinking about the price tag. They’re thinking about everything they get for their money: Time, flexibility, and a great meal.
Decide whether you’re open to a buyout—and what price you’ll accept.
During periods of inflation, it’s not uncommon for the big players in any industry to start acquiring their smaller competitors. Small businesses and startups are often hit hardest by inflation. If their owners are struggling for a way to keep cash in the bank, a buyout may be their best option. And if the business is flagging, they may accept a lower price than they would otherwise.
Of course, we’re not suggesting that a small RDS is doomed to fail. Nor are we actively advocating for you to sell your business. But it’s worth being aware of all your options, as well as your goals. Are you at a stage in life or business where you’d be open to selling? Do a little research to determine how an acquisition would have to unfold for you to be open to it. You might even talk to a broker about how to price your business.
One of the most important tools for navigating an unpredictable season is excellent food delivery software. DataDreamers was designed with premium features to minimize the stress and detail management of the food delivery process. Plus, our pricing is totally transparent and predictable, so you never have to worry about a surprise bill.Want to learn more? Request a demo >