by Brandon Reiter
As a small business owner, rapid inflation can be detrimental, but there are some ways to combat some of its negative side effects
Buy In Bulk
In periods when inflation is rapidly rising, the main notion is that something today will be a lot more expensive tomorrow. Therefore, as a business owner, if you are sitting on some free cash, you would be better off buying more supplies or raw materials than you normally would, because they will end up costing more as you continue to wait.
Raise Your Rates
If the price of everything else is rising, your products/services should too. Of course, you want to be wary as you do. Depending on your industry or clientele you may not have the luxury to raise your prices and maintain demand.
Fill Up Your Tank
If you travel by car a lot to conduct business, you want to fill your tank up as much as possible even if it is not empty. Gas prices are continuing to soar, especially with the escalating Russia-Ukraine conflict. By buying gas before you need it you are staving off the more expensive prices that will continue to rise in the near future.
While it is best not to sit on cash, as rising inflation will continue to lower its value, banks tend to pay more interest on savings accounts when rates are high. Compare your bank account’s APY with other options and make sure you are getting the highest interest reward possible on your idle cash.
As inflation rises, so does the cost of living. As the cost of living rises, so does the cost for labor. If you are trying to expand but find it too expensive to bring on full time employees with high salary demands too large for your budget, an alternative is utilizing freelancers and independent contractors to fill in the gaps. For example, instead of hiring a full time bookkeeper for $60,000/year you can hire a virtual CFO… like Skyview… for as low as $150/month.