Inflation is one of those things one simply cannot afford if you're in the business world. That is unless you plan for this occurrence so that your business doesn't suffer quite as much when it comes to outlaying capital to accommodate this 'extra expense.' So if your current inflation rates are expected to rise in the foreseeable future (as they most certainly will), here are some helpful tips on how to plan better for this so that it doesn't have you pulling your hair out in frustration.
One way to counteract the negative effects of inflation is to figure out ways you can be more productive. For example, you could employ smart time management principles to ensure that your productivity levels remain the same or even improve despite the rise in prices. Or perhaps you've noticed that there are certain time lapses that are costing your business in terms of productivity, in which case you could try using technology to help streamline your business and manage your time better. For example, you could use a project management tool such as Wrike for businesses that have to stick to a tight budget. This tool allows you to manage and oversee projects at a glance whilst improving team collaboration as everyone has access to tasks in real-time and can track their progress as they go.
Furthermore, there are many types of software that one can use to further identify areas that need improvement in areas of finance specifically that will allow you to still achieve your financial objectives. An example is payroll software that can help you manage your invoicing process better so that your cash flow isn't affected by late payments, overdue invoices, etc. Payroll4Free is an excellent example of a payroll accounting system that allows you to process paychecks and payments for free if you employ under 25 staff whilst remaining tax compliant in the process.
Also, you could look at getting software that could help increase the visibility of your business in tough times, which is affordable and, in some cases, free. For example, you could use an online banner maker to design banners to put on your website or social media feeds to highlight special offers, discounts, or promotions that you want customers to take notice of that you believe they could benefit from in uncertain economic times. With a free online banner creator, you can choose a customized template of your choice and then finesse the details, such as incorporating your necessary brand colors, changing the font, inserting the necessary text, and even adding animation or video to ensure your banner creates a frenzy.
Raise your prices, too
It is common practice in business to raise one's prices in line with inflation rates so that you can still achieve your profitability objectives. Of course, there is a formula that many business owners use to calculate this price increase so that it is just easier to implement. This is calculated by dividing your current actual value by your CPI (Consumer Price Index) index value and then multiplying it by a hundred to give you a rough indication of your projected price.
Alternatively, you could just check out what your competitors are charging to give you an idea of what your price should be on average. Although this should be done subjectively, depending on the value aspect of your product or service, you could probably charge more if there is a higher perceived value attached to your offering.
Borrow at the right time
Certainly, many businesses need extra capital at some point to facilitate further growth or to help cushion any short-term financial needs that may require additional funding. As such, obtaining a loan may be the next logical step. However, it's important to obtain such a loan at a fixed rate rather than at a variable rate so that you don't feel the effects of interest rate fluctuations quite as much.
While inflation is a certainty, you don't have to grapple as much with the prospect if you have adequately anticipated (and budgeted) for these challenges.
Guest Post by https://www.citebrain.com
Photo by Pexel
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