Protecting Against Inflation and Increasing Expenses

Are you a business owner worried about increasing expenses and the recession? Do you wonder what you can do to preserve the success of your business?

As prices continue to rise, it is necessary to ask yourself how you plan to protect your business from increasing costs. There are seven steps that you can take to start insulating yourself from increasing rates.

Put extra cash into interest accounts

Although this method will take time for you to see a benefit, due to higher interest rates you should see a larger payout on your interest-bearing assets. Make it a practice to start sweeping extra cash into interest bearing certificates of deposits, saving accounts, or bonds because you will see a difference in your earnings.

Refinance your debt

It has been forecasted that interest rates will continue to rise, so it is time for you to lock in on a lower interest rate to have more of the payment go to principal. Consider paying down your high interest credit card debt or refinancing your balances into a longer-term loan with a lower interest rate.

Shrinkflation

Shrinkflation is a practice that many big brands use. Essentially, businesses deliver slightly less of a product or service for the same price. Can you modify your product or service to keep the price the same but offer slightly less to reduce labor or materials expenses?

Lock in long term agreements

It can be very beneficial to lock in rates with your suppliers for a long term.

For example, if your landlord wants to keep you as a tenant, discuss with them the possibility of a longer-term lease agreement with fixed increases. Perhaps a supplier will fix the costs of products/services you purchase at a set price with a longer contract term. By securing these agreements, you will have a better handle on your cash requirements, and you will feel more in control.

Buy inventory, property, or equipment

Due to increasing prices, it may be the time to buy items at a lower price so you can later sell at a higher one. You can begin investing in property and equipment which can help increase efficiencies so when prices increase you can be more profitable.

Invest in technology

If you would like to increase the amount of work that can be completed in a specific amount of time, consider investing in technology which can help you streamline your processes. For example, look into software that can help manage tasks you handle with better workflows which in turn reduces expenses.

Revisit your investments

Lastly, consider speaking with your financial advisor to see if it is sensible to make a shift in some investments. Obviously, this depends on your risk tolerance and income, however, if you are able to be riskier now, you may have a better results down the line.

It is important to remember that thinking ahead and making adjustments is important for your success. Prepare for changes in the near future and plan your moves so you can help your business grow, even during challenging times.