4 Ways Startups Can Beat Inflation

The opinions expressed by entrepreneurs contributors are their own.

are famous for doing big jobs on a small budget that drives society forward, often succeeding against all odds. In fact, and the startups behind some of them are responsible for creating 1.5 million new jobs each year in the United States.

But right now we are all feeling the pain of inflation.

CNBC reported huge jumps in both the , which measures goods and services; and the Producer Price Index, which measures the costs paid by wholesalers. In the midst of what is already quite a risky business, startups can be particularly vulnerable to market fluctuations.

But we must continue. So if you want to build and sustain an inflation-proof startup, what can you do?

Related: Inflation is a Different Beast for Entrepreneurs. Here's how to protect yourself.

Develop a spending strategy

It's easy for founders to fall into some expense traps. Some entrepreneurs are so passionate about their vision that structuring their spending is the last thing on their mind. On the other hand, there are financially savvy founders who become obsessed with a simpler approach to running their business.

But this mindset can also increase the risk of missing out on critical investments and opportunities that could ultimately help their business grow. To deal with inflation, a healthy and realistic attitude towards your company's finances is essential.

As operations become more expensive, many will have to restructure. If you want your startup to thrive, any changes you make must be in response to real-world conditions. Many start-ups fail simply because they lack capital. No founder wants to create this situation.

However, you don't want to cut costs so intensely that your business can't effectively do what it's supposed to. If budget cuts are keeping anyone you might employ from working or negatively impacting your customers, it's likely to do more damage to your startup than inflation. So be smart and develop a spending strategy that meets inflation, but protects your startup's basic needs.

Related: 4 Ways to Protect Your Business Against Inflation

Accept to be a young startup

Even if your startup has been around for a week, you've probably already felt the pressure to scale and grow it. We live in a world where many founders dream of having the next game-changing unicorn, and ambition is a powerful motivator. But in times of high inflation, there are actually a lot of advantages to being a small startup.

Often large companies have so many moving parts (perhaps even foreign ones) that it can be difficult to know where the money is going and why. If you're a small startup, tracking your expenses is much easier. Knowing why these resources are spent and what exact value they provide should never be complicated.

Remember that many startups start with a single entrepreneur founder. That means this founder probably wears a dozen different hats, which has its pros and cons, of course.

But a big plus is that they won't have to schedule meetings with multiple departments, and maybe even hire outside help, to reconfigure spending and efficiency. Startups simply have lower operating costs in general. This means that they are less affected by inflation than large companies. The less expenses a company has, the less inflation threatens. Depending on your type of startup, it's always a great time to go into business.

Related: How to Calm Financial Panic During Inflation Spurts

Think about material contracts

If your startup requires a lot of materials, or specific materials that are subject to price increases,