Inflationary pressures can harm your firm irreparably, decreasing profitability and valuations. Protecting your business from rising inflation is critical, and there are several steps you can do to reduce the impact. We spoke with 36 business owners in the United States to learn more about what they’re doing to prepare their businesses for potential changes. Here’s what they had to say:
Name: Abe Breuer
Answer: • Diversify supply chains to the extent possible, even if it raises costs in the short term: Although inflation-proofing a supply chain is unachievable in the current environment, mitigating measures are nevertheless prudent. Even if you’ve been implementing supply chain sustainability practices for the previous two years, this is still true. Because there is no easy way to deal with a shock of that size followed by worldwide inflation and uncertainty, supply chain concerns are pervasive not only in the United States but also around the world as a result of pandemic-related disruptions. Economic shocks are more vulnerable to a lean and cost-effective supply chain. Despite trade-offs, sustainability usually comes out on top in the end. Supply chain sustainability and resilience investments can take a variety of shapes. Diversification of vendors, domestic options, and stocking up on crucial materials can all help businesses maintain production. Stockpiling items that are hypersensitive to inflation, for example, can help mitigate the effects of rising costs. • Get strategic about pricing: Because inflation increases a company’s operating costs, it should be simple to justify raising prices, right? Maybe. Price increases can help you avoid some of those expense cuts, but you risk losing clients who don’t think your product or service is valuable enough to justify paying more. In the end, organizations must examine their bigger market as well as what their competitors are doing, rather than merely inflation. Small and midsize businesses, which typically lack market dominance, may not always have the power to affect general market prices. That’s when information on demand and market structure, as well as upstream and downstream expenses, becomes critical to a company’s price decisions. • Customers, costs, competition, and cash should all be considered when developing a pricing plan. 1) Customer: What role does pricing play in the purchasing decisions of customers? Do your customers appreciate the quality of your products and services or do they primarily purchase based on price? Companies with a high pricing sensitivity should stick to market norms. 2) Cost: What is the impact of inflation on your costs? Is the cost of commodities or labor much higher? 3) Competition: If your competitors have raised their pricing, you should consider raising yours as well. The only exception is if your organization can maintain stable prices to gain market share. 4) Cash: Your capacity to keep pricing stable will be determined by your cash flow. The most common strategy for businesses that need to raise prices to meet costs is a blanket rise. However, there are inventive pricing tactics that organizations can implement to decrease the perceived impact of an increase, particularly for those with price-sensitive clients or intense competition. Bundling and unbundling of products, installments, adding and deleting features, and multiple pricing methods for different product types are all examples.
Name: Adelle Archer
Answer: The biggest danger of inflation as it pertains to small business is the constant fluctuation in pricing, which can quickly destroy many of the line items in your business budget, which is why I recommend locking in pricing through long term contracts. It is important to remember that inflation does not happen in a bubble, and every ancillary business that you depend on to survive is going to feel the pinch. By locking in costs through long term contracts with suppliers, landlords, and even some of your higher paid employees, you can fix your costs and insulate your business from a volatile or inflationary market. Long term contracts may remove some of your bargaining power, however, that lack of flexibility will be more than made up when inflation hits, and you feel far less economic stress than your competitors who did not have the foresight to do so.
Name: Can Burak Bizer
Company: http://2fresh.com and http://canburakbizer.com
Answer: Basically, we make our planned purchases by now, before our money in our pocket looses value against goods. Investing in hard assets is one of our key measures. We use purchasing agreements in form of short term financing. This has financial cost, but in return we fix the future price. Indeed, our calculated return on investment is much greater. With the current situation, we make deeper distinctions between needs and wants. We do more renting, rather than buying. If a business item would have occasional usage, then we rent it. As with renting, overall, we are minimising our fixed costs. We moved to a more flexible model. With talents and human resources, we moved to a task/project based model. At home, we stocked food and filled up the pantry, with stockable long shelf life items. Their prices will rise soon. And, by now, no other financial investment brings the same return. So, we better keep our money on goods, rather than in our pocket. As investments, we are using gold and real estate for now. They seem like the safest bets, these days. I perceive an increasing risk with other financial instruments, which are mostly created to companies. For our creative industry business, we see these are time to afloat, not to prosper. So, our focus on sustainable business existence. Once the equilibrium is balanced, then, there might be our times to make money. +++++++++++++++++++++ Previously, I responded: In economy, inflation has its own definition is not exactly what businessmen think it is. With, that inflation signifies raise of prices, in dailiy business life. This alone, is not a right definition, as inflation rather signifies loss of value of fiat currency against goods and services – hence loss in purchasing power. I don’t want to go too deep into economics and finance, but fiat money is why we are having inflation. Otherwise, 4 eggs are (and will be) still egual 1 liter of milk, and it’s unlikely to change by inflation. Per this brief definition, the obvious outcome would be buying less with same amount of fiat money – and accordingly we see prices rise. Price rise is not the reason, its the outcome. The true reason is fiat currency loosing its value. Also, price vs value should be differentiated, and not to be confused. Value is the reality, and one shall think in terms of value, not by price. In fact, inflation is perceived as rise in prices – and not value. So, how to protect us against all of these? The key is thinking in value, beyond money and taking your wealth out of monetary system – briefly in assets. And the way of doing it is investing physical goods. This may be in form of: • Buying (and stocking) key and major business items and expenses – from business perspective • Buying gold, real estate, etc. – from investment and finance perspective • Buying pantries, etc. – from household perspective, etc. For businessmen, financing might be a viable option, as in form of using credit to buy assets, and fixing the price before rise. Of course, it comes with its financial cost. The question isn’t whether its for free, the question is whether it’s profitable. To include, the key in our fight against “inflation” is to invest in goods and physical assets, which are likely to keep their “value” over time – even though their prices rise.
Name: Evelyn Ott
Answer: Firstly, I compare last year to this year to calculate how inflation affects my costs. Then, I make sure to update my forecast, assuming increasing costs. I also increase my prices and monitor costs by securing prices from suppliers.
Name: Deaver Brown
Answer: Simply Media has transitioned our 819 & counting books to all online sales to avoid all inflationary costs, benefit for IT deflation from AWS & GoDaddy site development & maintenance, use all AWS displaced India contractors, and ride our FAANG group, Shopify, Spotify & walmart.com customers all over the world with their accepting automatic cheap direct uploads, no meetings or travel, and high prompt payments. We support them with our website as a landing page & use focused marketers such as Pinterest. Being the OPP (opening price point) we get most promos free from Amazon and others. Advice: energy is the villain with no fracking or pipeline rules. Oil is in everything and considered 70% of manufacturing costs as an example. Then WFH; domicile in a no state tax state; close offices. Less is more. More if you want it.
Name: Dominic Harper
Answer: To combat inflation and control the effects and impact of it, we always make sure there is spending visibility. Costs dictate stability and expense management is very important to control the finances of a business. Knowing where your money is spent, how much you’ve gained, and what spending habits your company has is critical to establish a definite analysis of your business unit. Spending should be visible to the managers, to know their limits and ensure that they are accountable for all the business and finance decisions they make. In our company, we practice transparency in spending and make sure that every department gets a copy of the liquidations, and requests to establish rational distribution of expense costs accordingly. Reports are also necessary for auditing purposes. This way we are able to prepare more for inflations as all financial records are set straight.
Name: Goodell David
Answer: I am preparing my business for the upcoming inflation by changing many of the products I sell to be more durable and of better quality, so that they will last longer. I am doing this because in times of inflation people will want to buy more durable products instead of cheaper products that break easily. I am also raising the prices of my durable products so that they are more expensive than the short-durability products. This will mean more profit for my business because the people who are prepared for the inflation will want to buy a durable product regardless of the price. In this way, I will have stock that can easily last through the inflation period without losing value. It will also be cheaper four our clients in the long run as they will not have to purchase replacements over and over during the hard economic times.
Name: Harrison Hosking
Answer: To prepare for inflation, the team at KEAK has been diversifying (for years now), and dollar-cost averaging into BTC and ETH. We also have a portfolio of NFTs that we perceive as having lasting value and utility. As inflation rises and many fiat currencies lose their purchasing power, we believe it’s vital to invest now into the business and project to make the most of our liquid assets. Although BTC is seen as an excellent store of value over the long term, its volatile nature and innate ability to succumb to more traditional market pressures means we don’t advise allocating too much of one’s portfolio into it, but to DCA over time. Because we see it as a revolutionary tech, our team has no problems doing so even as the price experiences spikes and heavy dips, as in a decade or more we’re predicting that the current price of BTC will be way back in the rear-view mirror. Essentially, to combat inflation as a business, we are investing in assets useful to the business that will not devalue over time – development, tools, infrastructure, and utility NFTs – while also investing small amounts of fiat regularly (Dollar-cost-averaging) into big cryptocurrencies such as BTC and ETH, that are likely to survive the bear market when it comes (technically tech stocks are already in a bear market, by definition).
Name: Jeffrey Zhou
Answer: Maintain a high employee retention rate Your employees play a crucial role in your business’s success. Retaining key talents is more affordable and cost-effective than finding and hiring new talents. You’ll save money on unbillable hours and training new hires to be up to speed with what the company needs. Leverage automation Let technology help you streamline and speed up your processes so you and your team can focus on other core functions of the business. Automation can boost your productivity so you can do more in the same amount of time to make money, save on costs, and help the business thrive. Plan for scalable growth Navigating through an inflationary era may require more than just trying to save on costs. You also need to have strategic financial action, including scalable growth. Scaling means you should be able to generate consistent revenue without spending too much resources.
Name: James Jason
Answer: At Notta, we are preparing our business for the upcoming long-term inflation by automating most of our processes so we can cut back on labor needs and expenses. Decreasing the amount of labor that my business needs to sustain day-to-day operations is a sure way of reducing my overall costs in all aspects. I will look through my processes and activities to see if any can be automated or even partially automated. In the long-run, this will save us a ton of money and toughen us even as we anticipate a tough inflation period. By reducing our expenses, we shall also cushion our customers from the price increases that come with inflation. In short, we shall protect both our business and clients alike.
Name: Jeff Mains
Answer: * Improve your ability to manage your debt. In the face of anticipated inflation, being able to pay off part of your debt is unquestionably the wisest course of action. Any debts or credit cards may be paid off or reduced in any way? Analyze your financial situation to determine whether you can reduce any high-interest debt in the near future. Identifying ways to reduce your monthly debt obligations absolves up cash that may be used to assist your firm if inflation becomes a significant concern in the near future. * Talk to your suppliers about renegotiations. Even though you’re committed to your suppliers, it’s important to remember that in times of crisis, small companies must make tough decisions to stay afloat. You may be able to work out a deal with your present suppliers if you mention the difficulties your company is now experiencing. If this is the case, it may be beneficial to shop around to get the greatest bargain available. Never underestimate the value of a good deal of negotiation.
Name: Luke Lee
Answer: It is not just only the consumers who experience the impact of rising inflation in the economy. Businesses like ours shoulder the effects by receiving lower profit margins for the products that we sell, thereby devaluing the same effort that we exert. In tackling the soaring inflation, our business uses three key strategies. 1. Our Debts are Refinanced to a Longer-Term – A medium-sized Company typically prefers to finance company assets like manufacturing equipment, service vehicles, and other assets. As of writing, interest rates range from 2.5 to seven percent. In order to mitigate higher repayment due to soaring inflation, our business refinances debts and switches them to longer-term payments at the same interest rate. The rationale for this strategy is to allow the company to retain a strong cash flow position in the short term. 2. We enter into Futures Contracts – Our company produces custom-made leather jackets and apparel made from goatskin and lambskin. Having known that raw materials are vital to our production, we purchase raw materials in bulk and enter into futures contracts to maintain the purchase price of important inventory items and hedge against inflation. 3. We invest in Technologies – We are fortunate that we are in the middle of a revolution in the technological aspect of our lives. By now, it needs little explanation that investing in technology will help the company get rid of non-valuable processes that cost us money like mundane tasks, for example. Investing in systems and software may not readily be felt in a few months’ time but is beneficial in the long run.
Name: Linda Thompson
Answer: As a business, we thought that 2020 would be our breakout year. Everything was on course, until the inflation hit. Due to the current inflation, the past two months have been particularly tough for the business. We considered raising prices on our software solutions, but that would have been counterproductive since it would essentially cut down on our customer base. Businesses in the service industry don’t really have the option of raising options. Instead of raising the prices, we decided to change our product offerings. Instead of having two payment options- the base offering which is free of the premium, we introduced an intermediate category, while also cutting down on the features offered at the freemium level. This strategy creates a sense of urgency among free prospects, which translates to more sales.
Name: Matt Brown
Answer: You must first understand the impact of inflation on your profit. Next, utilize the prediction to plan for the effects of inflation by comparing your profit margin from last year to this year using the basket approach method. Follow these steps to determine how to increase your prices and maintain your gross profit margin.
Name: Lyle Florez
Answer: This is how you can protect the business from challenges during inflation: Adjust and be consistent: To remain above water during any season of high expansion, you should think about expanding costs and saving where you can. Attempt to focus on your cost increments given explicit inventory interruptions instead of raising costs in all cases. This will make less harmful associations with clients, as they may be more comprehension of your dynamic interaction. Similar to food and energy serious organizations, certain ventures will be more powerless against the impacts of expansion, while other assistance-based organizations might be less in danger. Assess where you need to raise costs and act appropriately. Deal with your income cleverly: Keeping around a lot of money can be harmful during inflationary times. As expansion rises, the buying force of your money investment funds might go down. Consider putting away that cash to stay aware of rising business sector costs. It’s smart to talk with a monetary guide to figure out which sort of speculations check out for your particular circumstance. The main concern is: Keep the absolute minimum of money in your record to save the buying influence of your cash.
Name: Martin Luenendonk
Answer: Inflation is a far-reaching ascend in the costs of merchandise, administrations, and their constituent components, which prompts a reduction in the buying force of the country’s cash simultaneously, not set in stone by the Central Bank. In a market economy, the costs of labor and products are continually evolving. A few costs go up and some go down. It relies upon the reason for inflation in any case, if the economy is encountering overheating movement, national banks can execute what is known as deflationary strategies that would check total interest, ordinarily by raising loan fees. There is an Inflation discussion of higher concerns about the 2022 economic environment, and representatives of the FED and the current government lament how inflation is being managed. In certain nations, national banks connect their nearby monetary forms to other people and along these lines are connected to their money-related strategies, (for example, the Gulf nations that stake their monetary forms to the US dollar and their financial arrangements are affected by the Fed’s approaches). At times, the public authority might set costs straightforwardly, when things appear to be gaining out of influence past what the resident can endure, and these value fixing strategies, as a rule, lead to the amassing of monetary commitments on the public authority. National financiers are progressively depending on their capacity to impact inflation assumptions as a device to decrease inflation. The more noteworthy the validity of national banks, the more prominent the effect of their assertions on inflation assumptions.
Name: Krish Ramineni
Answer: Inflation hits businesses of all sizes, especially small businesses, SMBs as well as startups in this case. One of the things that we found was a red flag that we saw across the industry was people were hiring too fast and people were hiring stretch hires meaning they were going over the budget to compete for talent. Now, we’re seeing the reverse where a lot of companies are laying off people, and there’s a higher supply of talent that is also available. Inflation has a role to play in all of this. One of the things that we’ve thought about is how we manage our hiring process so that we don’t overhire each quarter. That we are meeting our requirements and being conservative where it’s appropriate to be conservative. It’s much worse to overhire and then let go of people than to hire with a consistent plan and stick with your employees and keep them around. Also, the other thing we have to do is make sure that we educate our employees about goal setting, how we manage capital and spending, and where we are allocating the resources. You have to be much more conscientious of the bets you make. Are you spending a lot of money on advertising? Are you spending a lot of money on go-to-market initiatives or is that the best use of your money versus do you need to double down and invest in building a good product and find other low-cost customer acquisition sources? Ultimately, if you’re spending a lot of money to acquire customers and your customers themselves are not sticking around, then that’s a bad recipe. So we’re constantly focusing on our existing customers, how to bring them in, how to acquire customers through low-cost channels, and exploring that. And we are looking at ways we can also work with vendors that we bring on where we get good deals and good pricing because a lot of times these systems cost a lot of money – from server, infrastructure, cloud computing stuff, software so just being more oriented around that. I think with inflation as you see more companies churn, small businesses churn that might impact your customer base as well. So really focusing on keeping the product consistent and affordable for your employees is something we take great focus around. We want to ensure that we tackle retention and we keep people around for the long haul. It could be a rough six months. It could be a rough year for different companies. And I think the most important thing is to give yourself time and space to write out this bumpy period.
Name: Sergio Diaz
Answer: The way we are dealing with inflation is by increasing the fees of our speakers. Companies are well aware of inflation so while they may not like it, they understand. What I do not recommend is asking your employees to take a pay cut as this will send the wrong signal to your employees.
Name: Yuvi Alpert
Answer: For businesses that have set needs, meaning there are products they know they are going to buy consistently, one of the best ways to protect from an inflationary spike is to slowly stock up on inventory. Businesses that solely buy according to a weekly or monthly need to meet purchase quantities, can find themselves at the mercy of price hikes if they suddenly rise over the ensuing months. By purchasing products slightly over their monthly needs over a period of time, a business can build up a sizable back-stock, which can greatly insulate them in the case of inflation. In addition, allocating funds to purchase necessary equipment, even if it means that you may not need it right away, can also protect your business from sudden price hikes. By creating a line item in your budget for early purchasing of necessary goods, you can keep your costs at a constant, and protect you and your customers from inflation.
Name: Sara Graves
Answer: We have taken two steps to prepare for upcoming organizational challenges. First, we are working on long-term agreements with stakeholders like a long-term lease with fixed increases. Likewise, we are hiring higher-compensated employees for extended periods to streamline business activities and handle problems strategically. Secondly, we are targeting price increases on specific services where customers are most likely to be amenable. Unlike our competitors who are focusing on across-the-board price increases, we have segmented our consumer base and services into different categories and changed prices where our margins are most affected. This approach is allowing us to maintain our competitive edge in the market and satisfy our clients while overcoming financial hurdles.
Name: Sean O’Neal
Answer: “Prepare for long-term inflation by assessing your company’s productivity and identifying areas for improvement. Using technology to streamline communications and optimize processes is one of many ways to boost productivity while lowering costs. For example, use technology to automate time-consuming business processes like payroll, bill payment, and contact management. This also helps to reduce labor costs, which means fewer recruitment needs. Saving more business resources will help the business thrive despite the economic instability.”
Name: Linda Chavez
Answer: Inflation is a major concern for people all over the world, as it can have a drastic impact on their standard of living. Major Indicators Point Towards A Long Term Inflation Rising Prices Of Goods And Services This is the most obvious indicator of inflation, as it directly impacts the cost of living. When the prices of basic goods and services start to increase, it erodes purchasing power and makes it difficult for people to maintain their standard of living. Stagnant Wages If wages are not keeping up with the rising cost of living, then people’s purchasing power will decrease. This is a major concern, as it can lead to a decrease in demand for goods and services, and ultimately, a decrease in economic activity. Increased Money Supply When the money supply grows faster than the economy, it can lead to inflation. The money supply is increased when the central bank prints more money or when there is more credit available in the economy. Increased Government Spending Government spending can contribute to inflation if it exceeds the amount of revenue that the government collects. This can lead to an increase in the money supply, which can eventually cause prices to rise. Increased Demand When there is more demand for goods and services than there is available supply, prices will start to increase. This can be caused by a number of factors, such as population growth or an increase in consumer spending. There are a few things that we are doing to prepare for inflation: We Are Buying Assets The first step is to identify which assets are likely to maintain or increase in value despite inflation. This could include real estate, commodities, and other investments that typically hold their value well during periods of inflation. Besides our insurance selling business, we are focusing on buying assets. Improving Customer Service We must admit that at some point we will have no option but to increase the price of our services. Hence, We are striving to enhance customer service in order to encourage our customers to return after an increase in price. Reducing Operating Costs By reducing our operating costs, we will be in a better position to absorb the impact of inflation. We have already taken steps to reduce expenses by focusing more on online sales than physical ones. Also, we reduced spending on ads and started to focus on organic traffic to our site.
Name: Kyle Patel
Answer: We have already implemented payments through digital currencies in our business. Since digital currencies don’t have a centralized authority, there’s no option to produce extra amount of the available currency. It eliminates inflation and helps us maintain a value depending on the market. Not to mention the privacy and security associated with them.
Name: Justin Lovely
Answer: Inflation is becoming a huge problem as costs rise for businesses in every vertical. In my service business as a personal injury lawyer we are lucky to not be affected by increased inventory, as we do not have those types of expenses. We are still experiencing some issues in two areas of our business though due to increased inflation costs. With clients, it is imperative that the injured person seek medical treatment and follow the doctors orders by attending all treatment sessions. We are already starting to see treatment fatigue and clients not wanting to attend physical therapy sessions because some low income clients simply do not have the gas money to get to the doctor appointments. This is a detriment to their case as defense adjusters can argue that he or she is really not hurt because they neglected to attend all necessary medical appointments. We are constantly having to stay on top of the medical management side of things to make sure our clients get to where they need to be and on time. We are also letting them know that UBER and LYFT later billed back to the final settlement award is an option to alleviate the upfront gas costs. The second pain point we are experiencing from inflation is in our office staff. During Covid, staff enjoyed working from home. Productivity and firm culture however suffered. As the numbers dropped we of course reopened to a full office once again. However, employees are complaining of having to drive to work and be here. Why can’t we just work remotely? I have heard that question a few times in the last couple of months. We have made incentives to alleviate this pressure such as paying for lunch each day and allowing employees to leave early if the day’s critical tasks are complete. Inflation is a struggle for everyone in every business sector. Hopefully everything calms down and reverts to the mean and we can go on with our lives. The media exploit everyone’s fears so that doesnt help, but only time will tell the true effects of this pressure on business.
Name: Ray Charles
Answer: When I think about how I’m preparing my business to face the upcoming inflation, I think of it as two things: protecting my business funds and protecting my business itself. The way I’m doing that is by investing in gold and silver to protect my business if inflation gets really bad. To apply this counter method, I need to know the fundamentals of precious metals. Gold and silver are precious metals that have value and have been used as a stable currency for thousands of years. These precious metals have been used to protect money before, during, and after a financial crisis. Gold and silver have always been able to maintain value even when the currency is devalued. As such, I will transfer as much of my funds as possible into these precious metals.
Name: Leslie Radka
Answer: Wherever possible, I am planning and assessing. I check cash flow on a regular basis, streamline business areas as needed, and assess productivity levels to see if there is room for improvement. When I assess my current situation, I equip myself and my business with the tools and resources needed to prepare for the future. I’m acquiring assets. I’m thinking about borrowing today to buy core productive assets or another business, then repaying the debt with cheaper dollars later. Long-term leases with today’s inherent low interest rates are a viable alternative to borrowing. I’m going to rent out my facilities. Renting my facilities is still the best option in my situation, so I’m thinking about long-term extensions to lock in low rates while I can. Employees. I’m making certain that I have a good mix of full-time employees and contingent labor. This will allow me to be more adaptable in the future, depending on cost or competitive pressures. I have union agreements, so I will do everything I can to eliminate or reduce the impact of cost of living provisions. For my non-union employees, I am transitioning completely to a performance-based reward system – no merit raises across the board. Collections. I’m currently resolving any outstanding collection issues. Customers, particularly distributors, will try to stretch out terms and use my money to run their businesses during inflationary times.
Name: Ronald Williams
Answer: The business scenario is very uncertain for entrepreneurs due to inflation. Projections indicate a cooling of inflation in 2022. However, at the beginning of the year, we still have to live with very high rates. To prepare your business for inflation, I would advise having tight control over your spending. It will ensure long-term benefits in combating inflation. You need to practice careful and detailed control of your expenses to know exactly where to reduce expenses. Some factors for expense control to avoid passing pricing effects on customers include labor, commuting, taxes, etc. Also, keep a keen eye on your company’s situation. This includes negotiating debts, prices with suppliers, rents, fees and financing with financial institutions, and whatever else weighs on the company’s budget. This will pay off in the long term.
Name: Steve Anderson
Answer: If a company fails to acknowledge the effects of the inflation and anticipate the upcoming challenges, then the chances are that it will go downhill sooner or later. So, to ensure that my organization is in a safer place, I always find new ways that can be taught into my business, and here are some of them: Strengthening the pricing power: Ever since the beginning of the inflation, the general public has started concentrating more on planning their budgets precisely, so the businesses need to ensure what price rate would differentiate their products from their competitors. Then, they should improve the uniqueness and add variable pricing mechanisms, and the most important thing is to invest more in the Customer Experience. It would also be suggested for the companies to offer subscriptions and complimentary services for their products, and this would improve the rate at which the products are noticed by the customers. Evaluating the risks associated with the supply chain: The key vulnerabilities that the companies need to consider very precisely amidst the inflation are single-supplier dependencies, materials run through the JIT supply chain, and the long lead-time suppliers. Considering these, one needs to do the needful to set up alternative supply chains and not just change the suppliers.
Name: Mila Garcia
Answer: Inflation not only slowed down our business expansion plans, but it has also affected our employee compensation plans, as we have had to make adjustments, just to make sure that we are able to effectively retain the top talent that we have recruited in our workforce. However, these adjustments threatened to put pressure on us, so we took advantage of the situation by applying for a fixed interest rate loan, which has so far provided us with the necessary reprieve to make these changes. And since the loan’s interest rate does not ebb and flow with the rate of inflation, this enables us to slowly and steadily pay back the loan with cheaper money than what we originally borrowed, while also ensuring that we can keep strengthening our business growth, even in this tough market.
Name: Tommy Mello
Answer: Building on Customer Service: Inflation does do the job of repelling away customers with the increasing price rates. Despite that, you should be able to build a strong customer base beforehand so that inflation isn’t able to affect your sales. You should always focus on the service over the product in times like these. Because that’s exactly what will make the customers stay around in the future. You should also set the bar of your business high against your competitors.
Name: Jenna Carson
Answer: Inflation has impacted us in lots of ways, primarily with the core running costs of our business. Energy and tech equipment has increased in price, as have our salaries because we want our staff to feel comfortable in the current climate. We have turned to tech to help us find efficiencies and finding a technology platform that helped us with our finances and tax keeping has not only saved us time and reduced outsourcing costs but it’s also helped us actually understand what money we have access too, what we will owe in the future – this complete transparency is useful because it allows us to operate in the best way possible. Prior to an automated account technology, we were old-school finance experts who used Excel and out-sourced aspects around tax. But tech software does everything for us, keeps us compliant and our tool even has AI capabilities – meaning our accounts tech predicts what will happen in the next quarter, based on previous numbers.
Name: Kathryn McDavid
Answer: 1) By Adjusting our Pricing Strategy: After you’ve grasped the concept of inflation and thoroughly comprehended the dangers it poses, you should begin preparing your company for it. In this case, the first thing you should think about is changing your price plan. True, boosting your pricing can diminish demand, therefore you must maintain ongoing awareness of the right price-to-volume ratio. Early pricing lock-in is one strategy to combat an expected inflationary environment. You can achieve this by entering long-term contracts with suppliers or by using options/futures contracts. The objective is to lock in supply pricing while allowing you to increase sales prices. To put it another way, you should strive for fixed costs and increased income. 2) By Evaluating the labor market vulnerability: Inflation’s impact on labor markets is rather unpredictable. While we can’t predict which professions and skillsets would be affected, we can expect the following labor markets to be affected by inflation: • High-demand professions such as software engineering. • Low-wage and minimum-wage employment. • 1099 contract laborers, who can often reprise their wages more quickly than W2 employees. Develop a human resources strategy to attract and retain talent if your company is heavily reliant on the above professions. This should be accomplished through market-rate pay increases as well as non-monetary remuneration such as career advancement and employee benefits. Employee satisfaction derived from intangible benefits such as a sense of community and purpose is considerably more subject to inflationary pressures than employee satisfaction derived from tangible benefits such as a sense of community and purpose.