Can you run a small business during high inflation rates and with higher interest rates?
Running a small business in uncertain times, with supply chain problems, an unstable labor market, AI taking over and now high inflation, is a real challenge. A challenge that can bring a lot of stress and frustration.
Many consider closing their businesses due to the steadily rising economic and psychological costs. It is a rather pessimistic vision that, for some, can become a reality.
However, learn how to run a small business in times of high inflation and still make money in 2026.
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How Does Inflation Influence Small Businesses?
At first, it can be helpful to understand what inflation actually stands for. Generally speaking, inflation means nothing other than an increase in the prices of goods and services. As a consequence, it leads to a lower purchasing power of money.
Or in other words, decreasing the value of money.
What it means for small businesses is basically the growing costs of materials, supplies, and services that are required to maintain a business. To cope with this situation, most small business owners will raise their prices.
A business needs to do this to maintain its successful business during this time of higher inflation.
Or, as in for today, they have already done this.
According to Forbes, prices in 2023 remained high. On a month-over-month basis, CPI rose 0.4% in September—following a much softer 0.1% monthly gain in August.
However, food prices, housing, and medical care saw higher price increases.
Now, in 2025, gas prices have gone down, but diesel fuel hasn’t gone down much, which is used to ship goods across the country.
What Are The Reasons for High Inflation?
- Rising prices
- Higher Interest Rates
- Higher production costs
- Lack of materials
- Surge in demand
- High wages
- Government policies
- Expansion of money supply – the Fed’s printing more money
- Higher interest rates
It sounds like we are in the perfect storm here in the United States with higher inflation being reported month after month. What is a small business owner to do?
How To Run A Small Business During High Inflation Rates
To run a small business during high inflation, you must shift costs to customers. Since you, as a small business owner, are also a customer, this process will affect you as well.
High inflation rates can also mean narrower profit margins. All those aspects influence the ratio between income and expenses and the cash fluidity of your business.
For example, you may have to reduce your own payroll or switch to a home-based business to save on higher costs.
To run a business during high inflation rates, you need to have the profitability to remain successful and stay in business.
How To Survive Raising Inflation Rates While Running Your Small Business
Saving costs, right next to rising prices, is probably the first thing that comes to your mind when you’re trying to keep your business profitable.
To do this, you can try to keep your inventory to a minimum. You can also try to downsize your offer. Another idea is to change the suppliers to local ones and, as a result, cut the costs of transportation.
Manipulating revenue and costs is one way to keep profits stable. Review your budget to see exactly where all your business expenses are going. Then review and ask yourself, are they necessary to maintain and grow my small business?
You can also try to take some other action. One of the best ways is to try to cooperate with other businesses in the form of a joint venture.
You want to write a business plan with another business to set it up while you run a small business during high inflation.
What Is A Joint Venture?
A joint venture is a business form of partnership, but not in a legal way. At least two parties decide to pool their resources to grow their businesses. Look at their business model compared to yours, as you will work together to invest your resources.
It is an especially good idea to manage a challenging economic situation. Raising inflation rates affects every small business in your area. It translates into similar levels of motivation among partners to manage the project successfully.
An especially good form of the joint venture is a marketing strategic alliance.
Run a Small Business During High Inflation Rates With Co-marketing In Troubling Times Of Higher Inflation
You can combine your organization’s marketing strategies and resources to form a joint venture marketing approach. As a result, you can increase your share of the marketplace and your revenue by marketing your business.
By cooperating, you gain access to your partners’ targeted audience, which can become your new potential clients. You can also work more efficiently by sharing your solutions, cash flow, and resources such as databases, market research, and employees.
To sum up, it allows you to reach new audiences, raise brand awareness, optimize your marketing strategies and actions, and develop and execute new business plans.
By teaming up with other businesses that operate in your local area, you add a new dimension to the market and have a greater chance of keeping your business going in the challenging times of high inflation rates.
It’s a great way to pool your business resources, whether you are marketing a product or service or running a small business during high inflation.
Choose the Right Technology as You Run a Small Business During High Inflation Rates
Marketing is all about reaching your target audience, even when you run a small business during high inflation. The reasons why you want to do this and your goals might differ.
But chances are that most of your actions will take place online.
Most of your actions should take place online, since it’s so much cheaper than using more traditional advertising channels. Optimizing your online marketing strategy is a great way to save money and reach new potential customers.
Yet be mindful that your old social media channels or websites might not be enough to successfully implement your new strategy. Creating a new, more suitable space might be necessary.
You want your new marketing plan to be profitable, so it has to be well thought out and well executed. At the same time, you want to keep the expenses as minimal as possible.
Thankfully, creating a new website or landing page to inform your customers about your offerings clearly has never been easier.
Do It Yourself To Avoid High Inflation
You can actually do it yourself by using a website builder and CMS software. You don’t have to be a graphic or a web designer to do a professional website.
Choosing the right technology is also a game-changer in cutting expenses. No technical assistance is needed either.
Because you don’t have to outsource the task, you are saving time and money. The two values that matter the most in times of a bumpy economy are for most businesses.
Working with a web designer takes a lot of time and actually doesn’t guarantee that you will be pleased with the result. Communication is key, but it can also be a challenge for some.
If you decide to create a website by yourself, you have complete control over what you want to make. Please choose from one of the dozens of templates and customize it to the idea that you have for your business.
No coding skills are required to build your web presence. Ask yourself how much money you want to save to make your decision.
If your company is a brick-and-mortar-only business, think about how you could expand your business into an online business.
Conclusion: How to Run A Small Business During High Inflation Rates
Managing a business in such a testing situation is tough. The best thing you can do is to be cautious and aware of both threats and opportunities.
Please do what you can to save your existing customers, for it costs more to obtain new customers. Furthermore, ask for referrals.
When you get a chance to take more action and not just be a distant observer of developing events, make sure to analyze your options. Look for smart solutions that will help you benefit from them at a low cost of energy and resources.
Don’t be afraid to step outside the box and do something different as you run a small business during high inflation rates. Take advantage of the technology and networking as your manage your small business.
Your Turn: How To Run a Small Business During High Inflation Rates
How are you to run a small business during high inflation rates? I’d love to hear about it in the comments below.
Having a large inventory would actually be an advantage during times of inflation. Even if you don’t, if you can predict what products are regularly in demand and stock up on at least those while prices are lower, you have an advantage going forward.
While eventually you will have to increase your prices to replenish your stock, before that happens you can either maximize sales by having the lowest prices OR even better, set your price just under competitor’s prices and make increased profits on older stock.
A great example of this is visiting a rural lumber store or hardware store. The little Ace Hardware in a town near you often has the replacement parts and bulbs, belts, blades you need that the big box hardware stores don’t carry. And because their inventory turns over much slower, the prices can be lower.
We all need to carefully research and consider what is going to be in demand. No one has unlimited money to increase inventories. So think about what you could buy now that sells well and will be more expensive later.
Hi Gail, yes, that’s a great one to add to how to fight higher inflation. I actually do this at home with groceries and home goods. I just read saline may be an item hard to find in the coming months and since I wear contacts, purchased more saline solution. Of course, you have to check the expiration dates as well when you stock up and/or add to inventory for your business. Great points Gail. And I love shopping at those local Ace hardware stores. Thanks for coming by on this with your valuable input. Have a great day!