Small business experts give advice on navigating high inflation 

Long Island’s small businesses have had to contend with a lot of obstacles over the last two years, like surviving pandemic shutdowns, labor shortages and now, rising inflation.

To help owners navigate today’s challenging, high-cost environment, small business experts from three of the Island’s top colleges provided advice for business owners as part of a Thursday “Newsday Live” webinar.

The Newsday/Long Island Association virtual town hall, moderated by Newsday associate editor Joye Brown and economics writer James T. Madore, featured panelists Erica Chase-Gregory, director of the Small Business Development Center at Farmingdale State College; Stacey Finkelstein, associate professor of marketing at Stony Brook University’s College of Business; and Kenia Nunez, assistant dean of entrepreneurship and business development at Hofstra University.

Questions and answers have been edited for length and clarity.

Q: How much of my higher business costs should I pass along to customers?

Chase-Gregory: Small businesses should see if there are ways to reduce their labor costs, review insurance policies to “see if there are any cost savings being left on the table,” look into lower interest loans they can access, and speak with longtime vendors about potential savings going forward.

Ultimately, businesses need to make comprehensive assessments of their costs before passing along increases to consumers.

“There isn’t a dollar amount or percentage amount that’s right for you to pass along.”

Q: How can business owners retain workers? Are wage increases the only way?

Nunez: "People can leave for many reasons.”

While wage raises are always a tool for retention — especially at a time when consumer goods are costing much more — creating a positive and flexible work environment can also be a major incentive for workers to stay put.

Employee recognition software like Nectar, which allows businesses to bundle rewards, employee discounts and gifts, can also help to motivate  workers while making them feel valued.

Q: How should I respond to negative customer reviews on social media, especially complaints over higher prices?

Finkelstein: When responding to negative feedback, business owners should be open to hearing out their consumers and should be as transparent as is reasonable when addressing issues online.

Having no response or a defensive response would be unwise.

Platforms like Facebook or Instagram give businesses the opportunity to have an open dialogue with customers and offer any possible remedies or explanations.

When it comes to concerns over rising prices, try and be transparent about why costs have gone up, or consider providing different offerings so price comparisons are harder to make.

Restaurant owners, as an example, may want to redo their menus so that customers won’t be able to compare the same prices from a few years ago to now.

Q: Is now the time to invest in cost-saving automation, or should businesses wait for inflation to cool?

Chase-Gregory: Before making any big-ticket purchases, owners need to look at their budget in the long term — a year out — and in the short term — the next quarter.

Assuming a purchase is possible given the upcoming budget, or that the appropriate debt can be taken without major financial repercussions, it may be a good time to make investments that may save money  down the line.