Inflation has risen to levels unseen since the 70s and 80s. It’s unlikely to decrease any time soon. Rather, prices will increase as long as suppliers struggle to meet the demand for goods and services. While this situation may be new to many business owners, there are plenty of ways for them to formulate a plan that combats inflation’s effect on their company.
Go digital
COVID’s rippling effects emphasized the importance of having a digitally fluent leadership team. Using manual spreadsheets for quarterly forecasting to assess a company’s financial health is a considerable risk no business can afford right now. Instead, companies must adopt more agile computer systems which will quickly adapt to changing market conditions.
Raise prices
The cost of everything has gone up. So, business owners have to stop asking themselves whether they should raise prices and start asking when they should start. Unfortunately, there’s no one definitive answer to the question of how much prices should go up. Every business is different, and each faces its own unique set of challenges. That said, there are a few tips that business owners can follow when it comes time to increase prices:
- Make sure your costs have increased accordingly.
- Raise prices gradually.
- Communicate with customers.
Create a contingency plan
If there’s one thing we all learned from the toilet paper shortage at the start of the pandemic, it’s that supply chain disruption needs to be avoided at all costs. Now’s the time to build connections with new vendors and establish redundancies. Companies that expand their supplier network have more bargaining power and are less vulnerable to supply chain interruption.
Rising inflation is creating more uncertainty for many business owners who are already feeling insecure about the state of their businesses. Need expert advice? Boris Benic and Associates has the financial perspective to help you navigate the ongoing challenges of today’s business environment while guiding you toward a brighter future